The Quick Read: Privately held company stock is not an eligible asset on either path. On the asset depletion path, a cash-out refinance tops out at 60% of the value of a principal residence, and the cash in hand is that loan minus the existing mortgage payoff and closing costs, so a retiree with a mostly paid-off home keeps a larger share than one with a large balance.
- The cash is the lower of two limits: the leverage cap on the home’s value, and what the retiree’s assets can support.
- Subtract the current payoff and every closing cost from the capped loan. What is left is the check.
- On the depletion path, the loan has to qualify on the balances that were in your accounts before closing, because the money you pull out never counts toward qualifying.
- Pension and Social Security income is optional on both paths, and the depletion path can use it to supplement derived income, subject to underwriting.
- The qualifier path covers the entire loan with eligible assets. Whether it permits cash-out proceeds, and at what leverage, is set by the lender and is not published.
All figures here are ceilings and floors from select programs in Lendmire’s wholesale network. They are not offers, and every file is underwritten individually.
Key Terms Defined
Asset qualifier path: The loan is reviewed on assets alone. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount, and no employment or income is documented.
Asset depletion path: Usable assets are divided by 60 months to produce a monthly qualifying income. That income carries the housing payment and other debts through the debt-to-income test.
Cash-out refinance: A new, larger mortgage replaces the old one, and the difference comes to the borrower as cash after payoff and costs.
Leverage cap: The highest loan-to-value percentage the program allows for that transaction and occupancy.
Haircut: The part of an account’s balance that does not count. If securities count at 80%, the haircut is 20%.
Seasoning: The length of time funds have sat in an account and shown up on statements.
How the Cash Is Calculated
The math has four steps, and the first one controls everything after it.
1. Start with the appraised value. The appraisal sets the number. Estimates from a website or a tax bill do not.
2. Apply the leverage cap for the path, occupancy and transaction. On the asset depletion path, the cap on a cash-out refinance is 60% for a principal residence, a second home or an investment property. Rate-and-term refinances and purchases get more room, but a cash-out does not.
3. Subtract the payoff. Every dollar of the existing first mortgage comes off the top. A second lien or an open HELOC against the home does too, because the new loan must retire it.
4. Subtract the costs. Closing costs and any prepaid items reduce the check further. The lender’s own figures govern, and the brokerage does not quote fees.
The result is net cash. Headline equity is not cash, and a 60% cap does not mean 60% of the value lands in your account. It means the new loan cannot exceed 60% of the value. The old loan comes out of that first.
The table below shows the effect as shares of the home’s value. These are illustrations of the shape, not quotes, and they ignore costs.
| Existing payoff (share of value) | Cap on depletion path | Room under cap, before costs |
|---|---|---|
| 0% (paid off) | 60% | 60% of value |
| 20% | 60% | 40% of value |
| 40% | 60% | 20% of value |
| 55% | 60% | 5% of value, and costs may erase it |
| 60% or more | 60% | Nothing to take out |
Look at the last two rows. A retiree who bought decades ago and refinanced a few times may carry a balance near the cap. With only a thin gap under the cap, closing costs may leave little or nothing to take out, so the numbers are worth running before committing to a new loan.
Which Path Applies to a Retiree?
The path decides the leverage, the documents and the arithmetic. A borrower is qualified on one path at a time, so the figures below never blend.
The asset qualifier path fits a retiree whose eligible assets are at least the size of the whole loan. It documents no employment or income, and there is no traditional personal-income documentation, pay stubs or employment verification. Leverage runs up to 75% on a refinance of a principal residence or second home. It is not a fully documentation-free loan, though. Every file is fully underwritten, and the assets are proven with statements. Loans reach $4,000,000. Credit starts at a 600 minimum score, subject to underwriting.
Here is the catch for this article. Whether cash-out proceeds are allowed on the qualifier path, and at what leverage, is the lender’s call and is not published. Any retiree who wants cash from a qualifier-path refinance needs a lender’s answer on that file before planning around a number.
The asset depletion path is the one with a published cash-out cap. Usable assets are divided by 60 months, and the result becomes qualifying income. Loan sizes run from $125,000 to $3,500,000. Credit follows the lender’s matrix. The cash-out cap is 60% on a principal residence, second home or investment property.
Lendmire’s asset-based mortgage programs cover both paths. The first question on any retiree file is whether the portfolio can carry the loan outright, or whether it has to be converted into income.
What Counts as an Asset, and How Much?
Each path weights accounts differently. The numbers below are the share of the balance that counts.
| Account type | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities count at 80% |
| Cash, savings, money market | 100% | Cash accounts at 100% |
| Certificates of deposit | 100% | 100% |
| Retirement accounts (401(k), IRA) | 90% under 59½, 100% at 59½ or older | 70% at any age |
| Real-estate equity | Not listed | 60% |
Two points matter for a retiree. First, retirement accounts count for more on the qualifier path after 59½, while the depletion path counts them at 70% regardless of age. Second, accounts combine, so a retiree can stack brokerage, savings and retirement balances toward the loan.
Some assets do not count on either path. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible. The route for those is converting them into a seasoned cash balance in a regulated account, with the source reviewed by the lender. On the depletion path, custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are also out.
Privately held company stock is not an eligible asset on either path. A founder or shareholder retiring from a closely held company documents liquid assets instead. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages.
Seasoning and Statements
Statements have to be old enough to show the money is really the borrower’s.
- 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, though the source is still documented.
A retiree who just moved money between accounts should hold off on applying until the paper trail is clean, since recently moved funds show no history on the statements.
Which Limit Binds First: The Cap or the Assets?
A retiree faces two tests, and the smaller result sets the loan.
The leverage cap is the value limit. It comes out of the appraisal.
The asset test is the borrower limit. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is the only income source. Then the derived income has to carry the new housing payment and other debts through the debt-to-income test.
The program’s own example shows the shape. Take $1,500,000 in securities, which count at 80% for $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 usable. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts. The lender’s own calculation governs.
Two retirees with the same home can land in different places for this reason. One has a large portfolio and a small payoff, so the cap binds and the cash is limited by value. The other has a modest portfolio and a larger loan request, so the income test binds and the loan shrinks until it fits. Equity does not decide it alone.
The asset-derived income can also supplement documented income. A retiree who draws a pension or Social Security can pair it with derived income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when the derived income only supplements. That does not make the pension necessary. It makes it useful when the portfolio alone falls a little short.
Why Cash-Out Proceeds Cannot Help You Qualify
On the depletion path, cash-out proceeds never count as qualifying assets. If a retiree is planning to take $200,000 out and use it as part of the portfolio behind the loan, the plan fails. The loan must qualify on the assets that existed before closing.
This changes how a retiree should plan the use of the funds. If the money is meant for a second purchase, home repairs or a family gift, the retirement plan has to work with the assets that were there before the cash-out. The proceeds are spendable, but they do not stack back into the asset base.
The same logic applies to reserves. The qualifier path requires none at or below 75% loan-to-value, and above that the lender sets them. The depletion path has no published reserve months. Even so, a retiree who spends the proceeds immediately has a thinner cushion than the file suggests.
When the Answer Is “Not Much”
Three situations produce small checks.
A high existing balance. The table above shows the problem. When the payoff is already close to the cap, the room is small, and costs eat most of it.
An open HELOC or second lien. The new loan must retire it, so it comes out of the same room as the first mortgage.
A portfolio that is large but ineligible. A retiree whose wealth sits in closely held company shares, crypto, collectibles or pledged accounts may show little usable value on paper. The fix is converting some of it into a seasoned cash balance before applying.
For those retirees the better move might be a smaller loan, a different product or no refinance at all.
Investment Property Is a Different Loan
A retiree who wants cash out of a rental, not a home, stays on the asset depletion path. On that path, investment-property leverage is 60% on a cash-out refinance and 65% on a purchase or rate-and-term refinance. The qualifier path covers a principal residence or second home only.
Credit for non-owner-occupied rental property is treated as business-purpose lending under federal consumer credit rules, which is why investment-property files are reviewed differently from a home refinance. It is not a free pass, though. A law-firm analysis of business-purpose loans cautions that business purpose does not mean exempt from every compliance requirement, and state licensing can still apply. A first-time investor on the depletion path needs a 700 score, subject to underwriting.
A principal residence or second home is a consumer mortgage, and TRID disclosures apply there. That is a difference in paperwork, not in how the cash is calculated.
Pre-Application Checklist
Gather these before a scenario is run. Each one removes a preventable gap.
- Two months of statements per qualifying account for the qualifier path. For the depletion path, statements 120 days old plus a current one within 45 days.
- The current payoff statement, including any second lien or HELOC balance.
- A list of account types, so each balance is weighted correctly.
- Documentation for any lump sum, such as a business sale, inheritance or settlement.
- A realistic use for the proceeds, since they will not count as qualifying assets.
- Credit and housing history. Programs typically want 0x30x12, and one 30-day late in the last twelve months is considered case by case.
Frequently Asked Questions
Can a retiree with no job and no pension qualify for an asset-based cash-out refinance?
Yes, on the asset depletion path, subject to underwriting. Usable assets are divided by 60 months to produce qualifying income, so a retiree living on a portfolio can qualify without employment. The minimum is the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is the only income source.
Does Social Security or a pension add to how much cash I can take out?
It does not raise the 60% cap, because the cap is a share of the home’s value. On the depletion path, documented income can supplement derived income up to a 45% debt-to-income ratio. That can help the income test, but the leverage cap still sets the ceiling on the loan.
Does privately held company stock count toward the assets?
A founder or shareholder qualifies by documenting seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their counted percentages. Stock options and non-vested restricted stock units are also excluded on the depletion path.
Can I use the cash I pull out to meet the asset requirement?
No. Cash-out proceeds never count as qualifying assets on the depletion path. The loan has to qualify on the balances that were in your accounts before closing, supported by the required statements.
Is an asset-based loan the same as a no-doc loan?
No. Every file is fully underwritten, and the assets are documented with statements. What differs is that there is no traditional personal-income documentation, pay stubs or employment verification on the qualifier path. Programs change, and a lender’s own review governs the outcome.
Where This Leaves a Retiree
The cash is a subtraction problem, not a percentage. The cap sets the loan, the payoff and costs come out of it, and the assets decide whether the loan fits at all. A retiree with a lightly leveraged home and documented, seasoned balances has the most room to work with.
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. The consumer asset-based program is available in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. All terms are subject to underwriting and are not a commitment to lend.
For the mechanics of pulling equity out of a rental 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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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 §1026.3, Exempt transactions
2. Hunton, Beware of “Business Purpose” (law-firm publication)
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 and Apply for an Asset-Based Cash-Out Refinance as a Retiree · Can You Get Approved for an Asset-Based Cash-Out Refinance With No Income Verification?
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
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.