The Quick Read: It depends on how you use the home. Cash-out is available on the asset depletion path for a primary residence, second home or investment property, with the same leverage cap across all three, through select programs and subject to underwriting. A Montana rental you hold for income usually fits a DSCR cash-out loan better, because that loan tests the property’s rent instead of your portfolio.
- On the asset depletion path, cash-out tops out at 60% loan-to-value (LTV) on a primary residence, second home or investment property.
- The asset qualifier path covers the whole loan with assets, but the lender sets its cash-out terms and does not publish them.
- Cash-out proceeds never count as qualifying assets, and the home you are borrowing against cannot qualify you.
- Statements, seasoning and credit still apply. Skipping income documents does not mean skipping documents.
Which Path Fits Your Montana Home?
Montana is only the location of the collateral here. The program figures below do not change by state, and Lendmire’s consumer lending is licensed in Montana. The real question is which of two paths matches your situation.
The asset qualifier path covers the entire loan with eligible assets. You document no employment and no income. The asset depletion path turns usable assets into imaginary monthly income by dividing them by 60 months. That income then runs through a debt-to-income (DTI) test, which compares your monthly debts to your income. You qualify on one path at a time, never a blend.
The paths treat cash-out very differently. On the qualifier path, the lender decides whether cash-out proceeds are allowed and at what leverage. Those terms are not published, so a plain answer there means asking about your specific file. The depletion path publishes its limits, which makes it the clearer route for a cash-out request.
Cash-Out Leverage on the Depletion Path
Leverage is the most important limit on a cash-out. Across the wholesale network, the depletion path caps a cash-out refinance at 60% LTV on a principal residence, second home or investment property. A purchase or rate-and-term refinance on a primary or second home can reach 80%. On an investment property, a purchase or rate-and-term refinance tops out at 65%. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
A rate-and-term refinance changes your loan terms without taking cash out. That is the easier transaction. Cash-out sits at a much lower ceiling, so the amount you can pull is smaller than most homeowners expect.
| Transaction (depletion path) | Primary or second home | Investment property |
|---|---|---|
| Purchase | Up to 80% LTV | Up to 65% LTV |
| Rate-and-term refinance | Up to 80% LTV | Up to 65% LTV |
| Cash-out refinance | Up to 60% LTV | Up to 60% LTV |
These are ceilings, not offers. Credit, loan size and the lender’s matrix can all pull the number lower. Loan amounts on the depletion path run from $125,000 to $3,500,000, subject to underwriting.
A free-and-clear home still counts as a cash-out. If the home has no mortgage and you borrow against it, you are taking cash out. The 60% cap applies.
What Counts as an Asset?
The haircut, meaning the share of a balance the lender will count, depends on the account type and the path. The two tables never mix. Here is how the depletion path treats each type.
| Asset type (depletion path) | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts | 70% at any age |
| Real-estate equity (other property) | 60% |
Several things do not count on the depletion 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.
The qualifier path is more generous with credit but asks for more. Brokerage, certificates of deposit, money market and savings all count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Cryptocurrency, precious metals, collectibles and borrowed or pledged funds are not published as eligible on either path. The usual route is converting them to cash in a regulated account and letting the balance season. The lender reviews the source of those funds.
The Home Itself Cannot Qualify You
A rule that surprises many homeowners: the equity you are pulling out cannot be the asset that qualifies you. Federal ability-to-repay rules let a lender rely on income, assets or both. They also tell the lender to look at assets other than the value of the dwelling securing the loan. The CFPB’s Regulation Z commentary lists savings, vested retirement accounts, stocks, bonds and certificates of deposit as examples of countable assets. The eCFR text of the rule also requires the lender to verify those assets with reliable third-party records.
Two practical results follow. First, your qualifying assets must live outside the collateral. Second, the cash you take out cannot be recycled into the qualifying pile. Equity in a different property can count at 60% on the depletion path, but equity in the house you are refinancing cannot.
Nothing in the federal rule sets a divisor or a haircut. Each program sets its own, which is why the same balances can produce different results at different lenders. The 60-month divisor and the percentages above belong to the programs Lendmire places files with.
How the Math Works, Step by Step
The asset depletion math has one purpose: turn a portfolio into a monthly number the DTI test can use.
1. Total your eligible assets after the haircuts above. 2. Remove funds needed for closing costs and any other committed uses. 3. Divide the usable total by 60 months. 4. Run that monthly income through the DTI test with the new housing payment and your other debts.
Here is an illustration. Say you hold $1,500,000 in securities, which count at 80%, or $1,200,000. You also hold $300,000 in cash at 100%. That makes $1,500,000 of usable assets. Divided by 60 months, that is $25,000 of monthly qualifying income. It then has to carry the housing payment and other debts through the DTI test.
You keep every asset. Nothing is sold or pledged. The calculation is a qualifying convention, not a withdrawal plan. The lender’s own calculation governs, and this example is for illustration only.
The qualifier path works differently. Consider an $800,000 loan. You hold $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). That counts as $800,000 of usable assets, which equals the loan. You qualify on assets alone, with no income documented.
Depletion has its own minimums. Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 liquid when asset depletion is your only income source. If you have documented income as well, asset-derived income can supplement it up to a 45% DTI, and the minimum-assets rule is waived.
Documentation, Seasoning and Credit
No income documents does not mean no documents. On both paths, your assets are documented.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements 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.
- Credit: the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700. Housing history is typically 0x30x12, and a single late payment in the last twelve months is considered case by case.
Inherited funds are a common source of assets. For a case where the asset pile comes from an estate, Lendmire’s piece Can an Asset-Rich Retiree Cash-Out Refinance an Inherited Home? goes further.
A rural or acreage Montana property can appraise differently from a suburban lot, since comparable sales may be sparse. The appraised value feeds directly into the cash-out cap, so an appraisal below your expectation shrinks the proceeds.
Is Your Montana Home a Rental? Look at DSCR Instead
If you hold the home as a rental, the asset-based route is usually the wrong tool. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Loan purpose matters, as Compliance Alliance notes in its look at how federal rules treat investment properties. So the way you plan to use the cash helps decide which loan fits.
A DSCR loan tests the house. The lender divides the property’s monthly rent by the full monthly housing obligation, including principal, interest, taxes, insurance and any HOA dues. The coverage figure is a coverage ratio, and the loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your portfolio acts as reserves, not income. The complete DSCR loans guide walks through that test in full.
Asset depletion tests the person. So the choice usually follows which side of your file is stronger:
| Your situation | Likely better fit |
|---|---|
| Strong rent, modest liquid assets | DSCR cash-out |
| Thin rent against a high price, large liquid portfolio | Asset depletion, if the occupancy fits |
| Owner-occupied or second home, no documented income | Asset depletion |
| Several rentals you plan to keep adding | DSCR |
Some programs allow asset depletion on an investment property, at the lower leverage shown earlier. That route suits someone borrowing for personal use against a rental. It does not suit someone borrowing to buy the next rental, who should generally look at DSCR.
DSCR also carries a trap worth knowing. It counts only the housing payment, so a rental can pass the ratio and still lose money in a vacant month. Taking the maximum cash-out on a thin-margin rental raises that risk. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Mistakes That Sink These Files
Most failed files fail on a few predictable points.
- Counting the house. Borrowers add the home’s own equity to the asset pile. It does not count.
- Counting the cash-out. Proceeds never qualify you on the depletion path.
- Ignoring seasoning. A large deposit last month fails the 120-day statement rule, unless it came from a business sale, inheritance or settlement.
- Assuming one lender’s terms apply everywhere. Divisors, haircuts and cash-out permission differ by program. Some programs allow cash-out on an asset-based loan and some do not.
- Borrowing at the ceiling. Portfolio values move. If your securities drop, the usable total and the monthly qualifying income drop with them. Leaving margin matters more than hitting the maximum.
- Mixing up purposes. Use of funds affects loan classification. Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset depletion: A qualifying method that divides usable assets by 60 months to create monthly income for the DTI test. You do not spend the assets.
Asset qualifier: A path where eligible assets, after credit percentages, equal or exceed the whole loan. No income is documented.
Cash-out refinance: A new mortgage larger than the old one, with the difference paid to you. A paid-off home still counts.
Haircut: The portion of an asset’s balance a lender discounts, because some assets are less liquid or more volatile.
LTV: Loan-to-value, the loan balance divided by the appraised value. Lenders set lower caps for cash-out.
Seasoning: How long funds must sit in an account before the lender counts them.
Frequently Asked Questions
Can I cash out a paid-off Montana home?
Yes, on the depletion path, at up to 60% LTV, subject to underwriting. A home with no mortgage still counts as a cash-out refinance, because you are taking money out against it. The qualifier path’s cash-out terms are set by the lender and not published, so ask about your file directly. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Does my home equity count as an asset?
Not the equity in the house you are refinancing. Equity in other real estate can count at 60% on the depletion path. Federal rules tell lenders to look at assets other than the dwelling that secures the loan, so the collateral cannot qualify you.
Do cash-out proceeds count toward qualifying?
No. On the depletion path, cash-out proceeds never count as qualifying assets. The qualifying pile has to come from accounts you already hold, seasoned and documented.
Can I use this on a second home?
Yes. A second home gets the same leverage as a primary residence on the depletion path: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out. Both are subject to underwriting.
What if my portfolio falls before the loan funds?
The lender works from the verified statements it relies on, and values can be rechecked. A drop lowers the usable total, which lowers the monthly qualifying income. Borrowers with thin margins can find the file no longer fits. A buffer above the minimums protects against that.
Next Step
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 these loans through select lenders. Every file is underwritten individually, and nothing here is a commitment to lend.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s asset-based mortgage in Montana page presents the program for Montana borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB, Regulation Z §1026.43 and commentary
3. Compliance Alliance, Regulation Z and investment properties
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for an Asset Depletion Jumbo Loan · Do Cash-Out Proceeds Count as Assets on an Asset Depletion Refinance? · Maxed-Out Jumbo vs Super Jumbo Loan for a Retiree on Asset Depletion
Guides: Asset-Based Mortgage in Montana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.