The Quick Read: Lenders run two separate tests on a large asset-based cash-out refinance: first they confirm that documented, seasoned assets either cover the loan outright or convert into enough monthly income, and then they confirm that the property value supports the loan at the leverage cap, subject to underwriting.
- Two paths exist, and a borrower is qualified on one at a time: assets cover the whole loan, or assets are divided by 60 months into qualifying income.
- On the asset depletion path, cash-out leverage tops out at 60% on a principal residence, a second home or an investment property, through select programs.
- Cash-out proceeds never count as qualifying assets.
- Privately held company stock is not an eligible asset on either path.
- No traditional personal-income documentation, pay stubs or employment verification are used, but every asset is documented with statements.
Who This Loan Fits
This structure suits borrowers with large balances and thin documented income. Think retirees living on a portfolio, someone who sold a business, an heir, or an early-retired professional. A conventional jumbo file asks for tax returns and pay stubs, and these borrowers often can’t show them in a form that supports the loan.
Lendmire is a mortgage broker. It places these files through select lenders in its wholesale network, and consumer lending runs in 16 states. The programs behind asset-based mortgage programs are fully underwritten. The only thing that changes is what the lender looks at to judge repayment.
The Two Paths
Pick the path first. Everything else follows from it.
On the asset qualifier path, eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. On the asset depletion path, usable assets are divided by 60 months into a monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Cover the whole loan | Become monthly income |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Refinance leverage | Up to 75% | Rate-and-term up to 80% (primary or second home), 65% (investment property) |
| Cash-out leverage | Set by the lender, not published | 60% on all three occupancy types |
| Statements | Two months per account | 120 days old, plus one within 45 days |
| Debt-to-income | No income documented | Derived income runs through the test |
Never blend the two columns. A qualifier-path asset percentage does not apply on the depletion path, and the reverse is also true. Confirm the path before you quote any figure to a client.
The Underwriting Sequence, Step by Step
Files move through the same checks in roughly the same order. Here is how they run on a cash-out above $1 million.
1. Choose the path. The broker looks at the balances, the loan size and the property type. Large liquid balances against a smaller loan point to the qualifier path. Large balances against a bigger loan, or a borrower who wants cash out at a defined leverage, often point to depletion.
2. Collect and season the statements. On the qualifier path, each account needs 60 days of seasoning and two months of statements. On the depletion path, 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 depletion path.
3. Apply the credit percentages. The lender counts only part of some balances.
4. Run the test. On the qualifier path, usable assets must meet or exceed the loan amount. On the depletion path, usable assets divide by 60 months and the result runs through debt-to-income against the new housing payment and other debts.
5. Check minimum assets (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 can never fall below $250,000.
6. Apply the leverage cap. The appraised value sets the maximum loan. On the depletion path, a cash-out is capped at 60%. Above $1 million, that cap does the most to determine how much cash a borrower can take.
7. Review credit and housing history. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount. A first-time investor on the depletion path needs 700. Housing history is 0x30x12. One 30-day late in the last twelve months is considered case by case.
8. Clear conditions. The lender reviews title, the appraisal and the source of any large deposit. At this size, files are reviewed individually by a person.
The binding limit is usually the leverage cap on the depletion path. On the qualifier path, it is the asset total against the loan. Equity sets how much cash is possible. Assets and the new payment decide whether the borrower can carry the loan.
How Assets Are Counted
Lenders discount balances because some assets can fall in value, carry penalties or take time to sell. The percentage below is the share that counts toward qualifying. The rest is the haircut.
| Asset | Qualifier path counts | Depletion path counts |
|---|---|---|
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Brokerage and securities | 100% | 80% |
| Retirement accounts | 90% under 59½, 100% at 59½ or older | 70% at any age |
| Real-estate equity | Not listed | 60% |
On the qualifier path, accounts combine. A borrower can mix brokerage, savings and retirement balances to reach the loan amount.
Some assets don’t count at all. The depletion path excludes 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. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible on either path. The usual route for those is conversion to a seasoned cash balance in a regulated account, with the lender reviewing the source.
Private Company Stock
A founder or shareholder with most of their wealth in a closely held company needs a different route. That route is documented liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages.
A Worked Example
The figures below are illustrative. The lender’s own calculation governs, and everything is subject to underwriting.
Picture a borrower on the depletion path. They hold $1,500,000 in securities, which count at 80%, or $1,200,000. They also hold $300,000 in cash, which counts at 100%. Usable assets total $1,500,000. Divided by 60 months, that produces $25,000 of monthly qualifying income.
That income then has to carry the new housing payment and the borrower’s other debts through the debt-to-income test. Assets of that size also clear the minimum-asset test of the lesser of $1,000,000 or 1.25 times the loan, subject to the lender’s reading of the rule. The loan itself is still capped by the 60% cash-out leverage on the appraised value. For a loan above $1 million, that means the property has to appraise at more than one and two-thirds times the loan. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
The same borrower can fall short in two ways. The assets may be enough, but the value may be too low for the cash they want. Or the value may be fine, but the derived income may not carry the larger payment. The first problem is fixed by taking less cash. The second is fixed by adding eligible assets, such as moving funds from an ineligible account into a regulated one.
On the qualifier path, the example is simpler. Consider an $800,000 loan with $330,000 in brokerage accounts (100%, or $330,000), $300,000 in a 401(k) for a borrower under 59½ (90%, or $270,000) and $200,000 in savings (100%, or $200,000). Together they count $800,000, which equals the loan, so the file is reviewed on assets alone. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published.
Why Cash-Out Proceeds Can’t Qualify the Loan
Cash-out proceeds never count as qualifying assets. This rule matters more as balances grow. Money that exists only because the new loan funded does not support repayment of that loan. On the depletion path, the lender measures assets before the transaction, not after.
The practical effect is that the borrower cannot plan to pull cash and then use it to meet the minimum-asset test. The assets that qualify the file must already be in place and seasoned on their own. A borrower who is counting on the new cash to clear a shortfall should expect the lender to reject that plan.
What Changes Above $1 Million
Above $1 million, a loan is jumbo almost everywhere. Orrick’s summary of the agency conforming limits puts the current one-unit baseline at $832,750 and the high-cost ceiling at $1,249,125. Those limits only govern what the agencies can buy. They are context, not a rule for this program.
Three things shift at this size. First, the minimum-asset test on the depletion path stops scaling with the loan, since the lesser of $1,000,000 or 1.25 times the loan will be $1,000,000 for loans above $800,000. Second, the 60% cash-out cap means the property value has to be well above the loan. Third, programs tend to apply extra review at size, and lenders in the network differ on how much. Ask each program about additional appraisal requirements and credit overlays before ordering anything.
The loan amount, more than the property value, drives how tight the leverage gets. A $1.2 million cash-out at 60% needs a much higher value than a $1.2 million rate-and-term refinance at 80% on a primary residence. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Why Agency Appraisal Forms Don’t Set the Rules
Agency guides name standard forms for appraisals and rent opinions. For example, Fannie Mae’s Selling Guide lists form 1007 for single-family rent schedules and form 1025 for small income properties. Those forms matter on investment-property files that rely on rent coverage.
An asset-based loan is not tested on rent coverage. The appraisal sets value, and value sets leverage. For an investor who wants to qualify on rental income, business-purpose rental financing is DSCR, which is a different product.
Where the General Rule Breaks
These edge cases account for most of the surprises.
- Investment property. The depletion path allows it, with leverage of 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The loan is business-purpose, not consumer.
- Supplemental income. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
- Retirement accounts. The age line moves the percentage on the qualifier path, so the same balance counts differently at 58 and at 60. On depletion, retirement accounts count at 70% at any age.
- Recent credit events. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
- Large deposits. A big, recent deposit that doesn’t match a statement history draws questions. The sale-of-business, inheritance and settlement exceptions apply to seasoning, but the lender still reviews the source.
- Unusual assets. Crypto or collectibles need conversion to seasoned cash first. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Key Terms Defined
Asset qualifier: The path where eligible assets alone must equal or exceed the whole loan amount.
Asset depletion: The path where usable assets divided by 60 months become qualifying monthly income.
Haircut: The part of an asset balance that does not count toward qualifying, such as the 20% not counted on securities on the depletion path.
Seasoning: The time funds have sat in an account, shown by statements, before the lender will count them.
Cash-out refinance: A new, larger loan that pays off the old one, with the difference going to the borrower after costs.
Debt-to-income: The share of monthly income that goes to the housing payment and other debts.
What to Prepare and What to Ask
Before a file goes in, gather statements for every account, with dates that satisfy the seasoning rule for the chosen path. Document the source of any large deposit. Pull a recent payoff statement on the existing loan. Confirm the title and vesting.
Then ask each program the same questions. Does it offer cash-out on the path you want, and at what leverage? What is its score and loan-amount matrix? Does it add appraisal or review requirements above $1 million? The right program for your situation depends on the property type, the credit profile, the leverage you want and how your assets are held.
Borrowers weighing approval odds can also read Lendmire’s piece Can You Get Approved for an Asset-Based Cash-Out Refinance Above $1 Million?.
Frequently Asked Questions
Can I use a 401(k) or IRA to qualify?
Yes, at a discount. On the qualifier path, retirement balances count at 90% under age 59½ and at 100% from 59½ on. On the depletion path, they count at 70% at any age. Both are subject to underwriting and to the account’s statements.
Does the lender look at my income at all?
No traditional personal-income documentation, pay stubs or employment verification are used on the qualifier path, and no income is documented. On the depletion path, assets are converted into derived income and run through debt-to-income. The file is still fully underwritten, and the assets are documented with statements.
How much cash can I take out above $1 million?
On the depletion path, cash-out leverage is capped at 60% of appraised value on a principal residence, second home or investment property, through select programs. Whether the qualifier path allows cash-out proceeds, and at what leverage, is set by the lender and not published. The cash you receive is the new loan minus the payoff and costs.
Can my business stake count as an asset?
Privately held company stock is not an eligible asset on either path. If you sell or are bought out, the proceeds can count once they are seasoned cash in a regulated account. Public securities and retirement accounts count at their percentages.
What if my assets are enough but the value is too low?
Take a smaller cash-out, or pay down the existing loan balance with your own funds. A lower loan amount fits under the leverage cap more easily. The lender’s appraisal controls the value, and each file is underwritten individually.
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. Programs and parameters are subject to underwriting and can change; 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.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Orrick — FHFA announces conforming loan limit increases
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-Based Cash-Out Refinance Requirements After Selling a Business · Best Asset-Based Cash-Out Refinance Program to Go Fixed · Asset-Based Cash-Out Refinance Lenders With Nontraditional Income Proof
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.