The Quick Read: On the asset depletion path, a homeowner can usually take out no more than a 60% loan-to-value cash-out refinance, minus the payoff, closing costs and holdbacks. Assets decide whether the file qualifies. The home’s appraised value and the leverage cap decide how much cash comes out.
- The asset depletion path caps cash-out at 60% loan-to-value on a principal residence, a second home or an investment property.
- A bigger portfolio does not raise the cash-out number. It only supports the qualifying income.
- Usable assets are divided by 60 months to produce monthly income for the debt-to-income test.
- Cash-out proceeds never count as qualifying assets, and home equity does not count as a qualifying asset on the home being refinanced.
- On the asset qualifier path, cash-out terms are set by the lender and not published, so no figure applies there.
- All figures are ceilings through select programs, subject to underwriting. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The Answer Comes From Two Separate Limits
The cash you receive is the new loan minus the payoff of the existing mortgage, minus closing costs and any holdbacks. The new loan is capped by loan-to-value on the appraised value. Assets never raise that cap.
Think of it as two tests. The first test is the leverage cap: the appraisal times the allowed percentage. The second test is qualification: do the borrower’s assets support the payment? The lower result controls. On most asset-heavy files, the leverage cap binds first, because the portfolio is large and the home’s value is the limit.
Here is the formula in plain words. Appraised value times 60%, minus the current mortgage payoff, minus closing costs, equals the most cash you can expect on the depletion path. If the payoff already eats most of the 60%, little cash is left. Plenty of homeowners with a large remaining balance find the answer is close to zero.
A Washington borrower follows the same figures as anyone else. The program numbers do not change by state. What changes by county is the home’s value, which feeds the appraisal. That is context, not a program parameter.
Which Path Fits You? (Assets Cover the Loan, or Assets Become Income)
Across the wholesale network, two paths exist, and a borrower is qualified on one at a time. Never blend them.
The asset qualifier path drives lender review on assets alone. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Leverage runs up to 80% on a purchase and 75% on a refinance. Loan amounts go up to $4,000,000. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published. So no cash-out figure belongs here. A borrower who wants cash out should expect the lender to confirm availability file by file.
The asset depletion path converts usable assets into monthly income. Usable assets are divided by 60 months. That income must carry the full housing payment and other debts through the debt-to-income test. Loan amounts run from $125,000 to $3,500,000. This is the path where cash-out has published ceilings.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| How assets are used | Cover the whole loan | Divided by 60 months into income |
| Income documented | None | Derived income runs through DTI |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term (primary or second home) |
| Cash-out leverage | Lender-set, not published | 60% |
| Loan range | Up to $4,000,000 | $125,000 to $3,500,000 |
Both paths document the assets. “No tax returns, pay stubs or employment verification” never means no documentation. Statements are reviewed and the source of funds is traced.
The Cash-Out Ceiling on the Depletion Path
Rate-and-term refinances on the depletion path run higher than cash-out: up to 80% on a principal residence or second home, and up to 65% on an investment property. Those higher figures are not cash-out figures. Keep them separate.
That gap matters. A borrower who sees 80% in a brochure and assumes it applies to cash-out will plan a number the file cannot reach. Rate-and-term means the new loan only pays off the old one and closing costs. Once real cash leaves the file, the cap drops to 60%.
Cash-out proceeds never count as qualifying assets. You cannot borrow the cash, then count it as your own balance to qualify for the loan. The lender looks at your assets as they were, seasoned, before the new loan.
Run the numbers on a home appraised at $1,500,000, using a modeled assumption and not a market figure. At 60%, the maximum new loan is the appraisal times 0.60. If the existing mortgage payoff already sits near that level, cash-out is thin. If the payoff is a small fraction, the room is larger. Closing costs and holdbacks come off the top either way.
How Assets Become Qualifying Income
The depletion path applies haircuts, which are the share of each balance that counts. They are:
- Cash accounts and certificates of deposit: 100%
- Securities: 80%
- Private stock: 75%
- Retirement accounts: 70% at any age
- Real-estate equity: 60%
Not eligible on this path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies.
Here is the sanctioned arithmetic. A borrower holds $1,500,000 in securities, which counts at 80%, or $1,200,000. The same borrower holds $300,000 in cash, which counts at 100%. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test. The lender’s own calculation governs, and this example is illustrative.
Note what the portfolio did. It produced income. It did not produce cash out. A borrower with a $1,500,000 usable pool and a home worth a modest amount still gets limited cash, because 60% of the home’s value is the ceiling.
One more point. The real-estate equity row refers to equity in other property. Under the federal ability-to-repay framework, the value of the dwelling securing the loan is excluded from the assets a lender relies on. Home equity is the thing you borrow against. It is not the thing that qualifies you.
What Binds First? Four Limits That Set Your Number
On depletion-path files, the cash-out number is the result of several constraints. The one that binds first changes by borrower.
| Limit | What it controls | Who it hits |
|---|---|---|
| Leverage cap | 60% of appraised value on cash-out | Borrowers with large existing balances |
| Payoff and costs | Reduces net cash | Everyone |
| Debt-to-income | Whether derived income carries the payment | Borrowers with modest usable assets |
| Minimum assets | Lesser of $1,000,000 or 1.25x the loan | Larger loans |
The minimum assets rule needs a closer look. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, liquid assets must also be at least $250,000. When asset-derived income only supplements documented income, up to a 45% debt-to-income ratio, the minimum-assets rule is waived.
Three borrower profiles show how the binding limit moves. These are illustrative only.
The retiree with a large IRA. Most of the wealth sits in a retirement account, which counts at 70%. The usable pool shrinks. Debt-to-income may bind before the leverage cap does. A bigger loan raises the payment and may outrun the derived income.
The taxable-portfolio holder. Brokerage securities count at 80% and cash at 100%. The usable pool is large. The leverage cap binds first. The home’s appraisal and the payoff set the cash.
The mixed-income household. Some documented income plus a portfolio. Asset income can supplement up to the 45% debt-to-income ceiling, and the minimum-assets rule is waived. The file often pencils with a smaller pool, but documented income must be verified.
Credit, Seasoning and Documents
Credit on the depletion path follows the lender’s score and loan-amount matrix. A first-time investor on this path needs 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Seasoning is document-driven. Statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
On the qualifier path, the standard is 60 days of seasoning and two months of statements for each qualifying account, with a 600 minimum score.
The usual file gaps are predictable. A statement is missing a page. A large deposit has no source letter. A balance moved between accounts without a paper trail. Cryptocurrency, precious metals, collectibles, business accounts beyond the borrower’s ownership share, and pledged or borrowed funds are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Because this is a consumer mortgage, TRID disclosures apply. The lender must also make a reasonable, good-faith determination of repayment ability, using third-party records for whatever income or assets it relies on.
Cash-Out Versus Other Ways to Reach the Money
A borrower with a large portfolio and a modest cash need has other options. Selling securities triggers a decision about taxes and a smaller invested balance. A home equity line leaves the first mortgage alone. A bank statement program is for borrowers who document income with deposits. For a rental property, DSCR drives lender review primarily on property-level rental income covering the payment, subject to lender guidelines.
Asset depletion keeps the portfolio invested. Nothing is sold or pledged. That is the draw. The cost is a new loan on the home and a payment that changes. Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset depletion: a way of turning eligible assets into monthly qualifying income by dividing them by 60 months.
Loan-to-value (LTV): the new loan amount divided by the appraised value of the home.
Haircut: the percentage of an asset’s balance that the lender counts, which is less than 100% for securities and retirement accounts.
Cash-out refinance: a new mortgage that pays off the old one and delivers extra cash to the borrower.
Seasoning: how long funds have sat in an account before the lender counts them.
Frequently Asked Questions
Does a bigger portfolio mean I can take out more cash?
No. Cash-out is limited by the home’s appraised value and the 60% depletion-path cap, not by your assets. A larger portfolio only helps you qualify, by raising monthly qualifying income. Subject to underwriting.
Can I use my home equity as an asset to qualify?
No. The value of the home securing the loan does not count as a qualifying asset. Equity in other real estate counts at 60% on the depletion path. Cash-out proceeds never count as qualifying assets either.
Is cash-out available on the asset qualifier path?
It depends on the lender. Cash-out terms on that path are not published, so no figure applies. Leverage up to 75% on a refinance is the published ceiling for that path, and the lender confirms whether cash-out is allowed file by file.
Do I have to sell my investments?
No. Nothing is sold or pledged. The calculation is a paper test on seasoned balances. Statements are still documented, and the lender reviews the source of funds.
Does the cash-out cap change on an investment property?
The depletion-path cash-out cap is 60% on a principal residence, a second home and an investment property alike. The difference shows up on purchases and rate-and-term refinances, where an investment property tops out at 65%.
Does this program work in Washington?
Lendmire’s consumer mortgage lending is licensed in 16 states, and Washington is one of them. The program figures are the same for a Washington borrower as anywhere else. Local home values affect the appraisal, not the rules.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker that arranges financing through select lenders in its wholesale network, and figures here are ceilings, not offers, not a commitment to lend.
Lendmire’s asset-based mortgage in Washington page presents the program for Washington borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Qualifier vs Asset Depletion for a California Retiree · Can You Cash Out a Colorado Home on an Asset Depletion Refinance? · How Much of Mutual Funds Counts Toward Asset Depletion Income?
Guides: Asset-Based Mortgage in Washington
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.