The Quick Read: Lenders underwrite an asset-based cash-out refinance on three things, your documented assets, your credit and the property’s value, and the tighter of those tests plus the leverage cap on your path sets the cash you can take, not the expansion plan. The lender does not grade your growth projections. It checks that your assets are real, seasoned and eligible, then sizes the loan to the property.
- The loan is a mortgage on a home you own. It is not a business loan and not a line of credit.
- One of two paths applies to you. Either your assets cover the whole loan, or your assets are converted into a monthly qualifying income.
- On the asset depletion path, a cash-out refinance is capped at 60% of the property’s value, whatever the occupancy.
- Cash-out proceeds never count toward qualifying. Only assets you already hold count.
- Privately held company stock is not an eligible asset on either path.
Everything below reflects how select lenders in Lendmire’s wholesale network structure these files. Figures are ceilings and floors, subject to underwriting, and the lender’s own calculation governs. Nothing here is a commitment to lend.
Key Terms Defined
Cash-out refinance: a new mortgage that pays off the old one and hands you the difference as cash, after costs.
Asset-based mortgage: a home loan qualified on what you own in liquid accounts rather than on pay stubs or tax returns. Lendmire’s asset-based mortgage program page covers the two versions in detail.
Asset qualifier path: the version where your eligible assets, after the credit percentages, must equal or exceed the entire loan.
Asset depletion path: the version where usable assets are divided by 60 months to create a monthly qualifying income.
Seasoning: how long money has sat in your accounts, proven by statements.
Net proceeds: the cash left after the old loan, liens and closing costs come out of the new loan.
Which Kind of Asset-Based Loan Is This?
This article covers the mortgage version: your liquid assets qualify you for a home loan. The same words also describe a commercial product, and mixing them up wastes weeks of research.
| Factor | Asset-based mortgage | Commercial asset-based lending |
|---|---|---|
| Collateral | Your home or property | Receivables, inventory, equipment |
| What is checked | Your liquid assets and credit | The business’s pledged collateral |
| Structure | One mortgage, fixed purpose | Revolving facility with monitoring |
| Best fit | Asset-rich owner, light income | Operating company with working capital needs |
If you want a facility that grows and shrinks with your inventory, that is the commercial product. If you hold large balances and want to pull cash from a property you own, keep reading.
Which Path Fits You: Assets Cover the Loan, or Assets Become Income
You are qualified on one path at a time, never both. Pick the path before you look at any other number.
On the asset qualifier path, the lender adds up your eligible assets at their credit percentages. That total must equal or exceed the entire loan amount. No employment or income is documented. The file is still fully underwritten, with statements, credit and the appraisal all reviewed. You provide no traditional personal-income documentation, pay stubs or employment verification.
On the asset depletion path, the lender takes usable assets and divides them by 60 months. The result is a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test.
Which path fits? A seller of a business or a retiree with a large portfolio often fits the qualifier path, because the balances dwarf the loan. A household with big assets but a loan that exceeds them usually needs the depletion path, which treats the portfolio as income. The depletion path is also where investment property is allowed.
The Underwriting Sequence, Step by Step
Lenders work in a fixed order, and each step can shrink the cash. Here is the sequence across the programs we place files with.
1. Property and occupancy. The lender confirms whether the collateral is your principal residence, a second home or an investment property. This sets which path and which leverage cap apply. Investment property is eligible only on the depletion path.
2. Purpose. You state what the cash is for. More on this in the next section.
3. Asset inventory. The lender lists every account and applies the credit percentages. Ineligible accounts drop out here.
4. Seasoning and statements. On the qualifier path, funds need 60 days of seasoning and two months of statements per account. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days.
5. Credit. The qualifier path has a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. Housing history is 0x30x12, meaning no 30-day lates in twelve months, though one late is considered case by case.
6. Value. An appraisal sets the property’s value. A low appraisal lowers the leverage ceiling in dollars, so it shrinks the cash directly.
7. Sizing. The lender applies the leverage cap for your path and transaction, then subtracts the payoff and costs.
8. Disclosures and file review. Because this is a consumer mortgage on a home, TRID disclosures apply. Title and the final review follow.
Steps three and six cause most of the shrinkage. Ineligible assets cut the usable total, and a soft appraisal cuts the loan ceiling.
How Lenders Treat the Expansion Purpose
The lender does not underwrite your expansion. It does not review your projections, your hiring plan or your business financials. Your documented assets, credit and the property carry the file.
That does not make the purpose irrelevant. How a lender classifies a loan depends on its primary purpose, and the CFPB’s Regulation Z text lists factors such as how closely the use relates to your occupation, your personal involvement and the size of the transaction. The rule’s own commentary names a loan to expand a business as an example of business-purpose credit, even when a home secures it. The OCC’s examiner handbook walks through similar factors. A trade-association compliance Q&A also notes that coverage varies by regulation, so each rule is analyzed on its own.
The practical takeaway is simple. The lender’s compliance team decides how your file is classified, and your stated use should match what you actually do with the money. Keep the paperwork that shows where the cash went. Tax treatment varies; consult a qualified professional.
How the Cash-Out Amount Gets Sized
The cash you receive is the leverage-capped loan, minus the payoff, minus costs. Equity is not the same as cash.
On the depletion path, the cash-out ceiling is 60% of value on a principal residence, a second home or an investment property. Say your existing mortgage equals 40% of the appraised value. A 60% cap leaves room equal to about 20% of value, and closing costs and any second-lien payoff come out of that first. Pay off a second lien or credit line and your net shrinks again.
On the qualifier path, leverage is up to 80% on a purchase and 75% on a refinance, for a principal residence or second home. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published. Ask your broker which lenders will do it before you assume it.
Two tests work at the same time. The first is the leverage cap against value. The second is the asset test, where usable assets must cover the loan on the qualifier path or carry the payment on the depletion path. The tighter one controls. A big appraisal does not help if your usable assets fall short.
Loan sizes differ by path. The qualifier path goes up to $4,000,000, and the depletion path runs from $125,000 to $3,500,000, subject to underwriting.
Which Assets Count, and Which Don’t
Each asset type counts at a set share of its balance. The part that does not count is the haircut.
| Asset | Qualifier path counts | Depletion path counts |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| CDs, money market, savings | 100% | Cash and CDs at 100% |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not listed | 60% |
Here is how the arithmetic works on the qualifier path. An $800,000 loan with $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) held under 59½ (90% counts, so $270,000) and $200,000 in savings (100%, so $200,000) totals $800,000 of usable assets. That is reviewed on assets alone.
On the depletion path, $1,500,000 in securities counts at 80%, which is $1,200,000. Add $300,000 in cash at 100%. Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test. These figures are illustrative, and the lender’s own calculation governs.
Cash-out proceeds never count as qualifying assets on the depletion path. Money you borrow in this loan cannot prove you can repay it. The same logic applies to pledged or borrowed funds generally.
Not eligible 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. Cryptocurrency, precious metals, collectibles and business accounts beyond your ownership share 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.
Where the General Rule Breaks
The sequence above holds for most files. These cases bend it.
Founders and shareholders of private companies. Privately held company stock is not an eligible asset on either path. Your route is documented liquid assets: seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their counts. On the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from the 120-day seasoning. The qualifier path wants 60 days.
First-time investors on the depletion path. Using the depletion path to buy or cash out on a rental property when you have never owned one raises the credit bar to 700. Investment property also carries lower ceilings: 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
Retirement balances under 59½. On the qualifier path, a 401(k) or IRA counts at 90% before 59½ and 100% after. On the depletion path, retirement accounts count at 70% at any age.
Small balances. The depletion path needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. It never goes below $250,000 liquid when asset depletion is your only income source. If you also have documented income, asset-derived income can supplement it up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Credit events. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Reserves. The qualifier path requires none at or below 75% loan-to-value. Above that, the lender sets them. The depletion path has no published reserve months.
Underwriters in our experience scrutinize recently moved money more than any other line item. A large deposit that appears inside the seasoning window, with no paper trail back to an eligible source, can stall a file until the trail is documented. Moving funds between your own accounts is fine if the statements show it, so keep the transfer records with the statements.
Documents to Have Ready
- Statements for every qualifying account: two months on the qualifier path, or the 120-day and 45-day set on the depletion path.
- Evidence of any large recent deposit, such as a sale or settlement document.
- Credit authorization and housing-payment history.
- The payoff statement for the existing mortgage and any second lien.
- Insurance and title information.
- A written statement of how you will use the proceeds, plus a purchase agreement or similar record once the money goes out.
The assets are documented on both paths. The only thing that goes away is income documentation on the qualifier path.
Compare Your Options
| Factor | Asset-based cash-out | HELOC | Business term loan | Commercial ABL |
|---|---|---|---|---|
| What is underwritten | Assets, credit, property | Income, credit, equity | Business cash flow | Business collateral |
| Collateral at risk | The property | The home | Business, often personal guarantee | Receivables, inventory |
| Structure | One lump sum | Revolving draw | Fixed term | Revolving base |
| Best fit | Asset-rich, income-light owner | Smaller, flexible needs | Established operating business | Larger operating company |
Each of the other products follows its own rules, and none of those rules are this program’s. The best fit for your situation depends on where your strength sits: assets, income or business cash flow. A broker that shops multiple wholesale lenders can match the scenario to the program, which a single lender cannot do. If your strength is rental income instead of assets, read how a DSCR cash-out refinance is underwritten to fund your business.
What the Decision Looks Like in Practice
Picture a founder who sold her company, holds the proceeds in brokerage and savings accounts, and owns a home with a modest mortgage. Her documented income is thin, but her balances are large. She wants cash for a second location.
She starts by sorting her accounts. The seasoned sale proceeds, now in cash and public securities, count at their percentages. Any remaining private shares do not count at all. If the usable total covers the loan she wants, the qualifier path fits, and whether it allows cash-out is a lender-level question. If it does not, the depletion path converts the same assets into income, and the 60% cash-out cap applies.
Then the property side takes over. The appraisal sets the ceiling, the old mortgage and costs come out, and what remains is her net. If that net falls short of the expansion budget, she has three options: wait for more seasoned funds, bring a smaller loan, or look at another product.
The honest answer in some files is that the strategy leaves her short. Better to learn that during sizing than after you commit to a lease.
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. Reach the team at 828-256-2183. Consumer lending for this program is licensed in 16 states, listed in the second FAQ below.
Frequently Asked Questions
Will the lender review my business plan?
No. The lender underwrites your assets, your credit and the property. It may ask what the money is for, and you should keep records of how it is used, but it does not grade the expansion plan itself. Underwriting is subject to lender guidelines, and every file is reviewed individually.
Which states is this program available in?
Consumer mortgage lending for the program is licensed in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. It is placed through select lenders in Lendmire’s wholesale network. Availability on any one file depends on the property, the path and underwriting.
Do cash-out proceeds count toward qualifying?
No. On the depletion path, cash-out proceeds never count as qualifying assets, and the same logic applies generally: borrowed money cannot prove you can repay borrowed money. Only assets you already hold, in eligible accounts and properly seasoned, count.
Does my company’s money count as my assets?
Only your ownership share of a business account may be considered. Business accounts beyond that share are not published as eligible on either path. The documented route is converting the funds to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
What if the appraisal comes in low?
A low appraisal lowers the leverage ceiling, which shrinks the cash directly. The assets test is unaffected, but the loan the property can support falls. Options include a smaller loan, waiting, or a different program.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. 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. CFPB Regulation Z, Section 1026.3
2. OCC Comptroller’s Handbook: Truth in Lending Act
3. ABA Banking Journal compliance Q&A
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 Lenders When the Property Is Owner-Occupied · Asset-Based Cash-Out Refinance Lenders When Traditional Income Verification Is a Barrier · Best Asset-Based Cash-Out Refinance Program to Fund a Business Expansion
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.