The Quick Read: Liquid assets carry an asset-based mortgage. Real estate equity generally does not, until it is turned into seasoned cash. Brokerage, savings, CD and retirement balances are what the lender counts. Equity in a house is wealth, but it cannot be drawn down each month, so it sits outside the pool on most files.
- Qualifier path: eligible assets must cover the entire loan, with no income documented.
- Depletion path: usable assets divided by 60 months become monthly qualifying income, tested through debt-to-income.
- Cash and CDs count at 100% on the depletion path. Real-estate equity counts at 60% on that path only, subject to underwriting.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- Statements are required on both paths. Nothing here is undocumented.
The honest answer is simple. If your balance sheet is mostly cash and securities, this loan was built for you. If it is mostly property, you have a conversion problem before you have a qualification problem. Which side you land on decides the path, the paperwork and the planning.
Side-by-Side
| Factor | Liquid Assets | Real Estate Equity |
|---|---|---|
| Review basis | Core of the pool on both paths | Limited credit on depletion path only |
| Documentation | Statements for every account counted | Appraisal and payoff evidence |
| Property types | Residence, second home; investment on depletion path | Same, once converted |
| Entity vesting | Accounts are usually personal | A property in an LLC may need a vesting change |
| Reserves | None at or below 75% LTV on qualifier path | Not a reserve source until converted |
| Timeline | Depends on seasoning of statements | Depends on a sale or refinance first |
The equity column assumes the borrower has not yet converted anything. Lender and program policies differ, so treat the column as published industry norms with qualifiers, not a promise on any single file.
Why Lenders Treat Them Differently
A monthly income stream needs money that can be drawn each month. Cash can. A brokerage account can, after a haircut. A house cannot, because reaching its value takes a sale or a loan. Value is also an estimate until an appraisal says otherwise.
The legal footing is not the obstacle. Federal ability-to-repay rules let a creditor look at income, assets or both, and they exclude only the dwelling that secures the loan. They set no divisor and no haircut. Those are program choices. Across the wholesale network, the pattern is consistent: liquid balances anchor the file, and anything else needs a conversion step.
Verification works the same way for every account counted. The rule calls for third-party records, which in practice means statements. A balance you cannot document does not count.
When Liquid Assets Are the Better Fit
Liquid assets fit the retiree living on a portfolio, the seller of a business, the heir who just received an inheritance, and the early-retired professional. Balances are large. Documented income is not.
Two paths exist, and a borrower sits on one at a time.
Asset qualifier path. Eligible assets, after credit percentages, must equal or exceed the whole loan. Brokerage, CDs, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Leverage runs up to 80% on a purchase and 75% on a refinance, with loans up to $4,000,000, subject to underwriting. Credit starts at a 600 floor. Seasoning is 60 days with two months of statements per account.
Take an illustration. An $800,000 loan, backed by $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) under 59½ (90% = $270,000) and $200,000 in savings (100% = $200,000), counts $800,000 of usable assets and is reviewed on assets alone. That is illustrative. The lender’s own calculation governs.
Asset depletion path. Usable assets are divided by 60 months. The result is qualifying income that must carry the housing payment and other debts. Cash and CDs count at 100%, securities at 80%, private stock at 75% and retirement accounts at 70% at any age. Loans run $125,000 to $3,500,000.
Run the numbers on $1,500,000 in securities (80% = $1,200,000) plus $300,000 in cash (100% = $300,000). That is $1,500,000 usable, divided by 60 months, or $25,000 of monthly qualifying income. That income then runs through the debt-to-income test alongside the housing payment and other debts.
Minimums apply here. 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 depletion is the only income source. Asset income can also supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived in that case. Statements must be at least 120 days old at application, plus one within 45 days.
Liquid assets also win on simplicity. The file is mostly statements. Fewer moving parts means fewer places for a file to stall.
When Real Estate Equity Is the Better Fit
Equity does the job when you are willing to use it as equity, not as an income source. Three situations fit.
You are equity-rich and want cash for a purchase. Selling a property turns equity into cash. A cash-out refinance or a home equity line can do the same. The proceeds then have to be seasoned and documented before anyone counts them, and lenders differ on whether borrowed funds count at all. Plan that conversion before you apply, not after.
You have a depletion-path file and want some extra credit. Real-estate equity counts at 60% on the depletion path. That helps at the margin. It is a smaller share than cash at 100%, so it rarely carries a file alone.
You are buying a rental. An asset-based mortgage underwrites the person. A DSCR loan reviews the property’s qualifying rent against its payment, as a business-purpose loan for non-owner-occupied investment property. Because DSCR loans are designed for investor purchases, they are reviewed differently from a standard owner-occupied mortgage. For an equity-heavy investor, DSCR is usually the structure that scales, and the complete DSCR loans guide walks through how that works. On the depletion path, investment property tops out at 65% on a purchase and 60% on a cash-out, subject to underwriting.
Entity vesting is a real friction. Equity lines generally want title in an individual’s name or a revocable trust. A property already deeded to an LLC may need a vesting change first, or a DSCR cash-out refinance instead, subject to program terms.
Spending liquid reserves on a down payment also shrinks the pool that generates income. The same dollars cannot fund the deal and qualify the borrower. Plan the post-closing balance first.
Mixed Portfolios and Edge Cases
Few borrowers hold only one kind of asset. A practical sort looks like this on the depletion path:
| Counts in full | Counts at a haircut | Not published as eligible |
|---|---|---|
| Cash, CDs | Securities, private stock, retirement, equity | Crypto, metals, collectibles, borrowed funds |
Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested RSUs are not eligible on the depletion path. Business accounts count only to the extent of the borrower’s ownership share. The documented route for other asset classes is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Credit matters on both paths. The qualifier path starts at a 600 floor. The depletion path follows the lender’s matrix, and a first-time investor there needs 700. Housing history is 0x30x12, with one late in the last twelve months considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
Lendmire’s piece Asset Depletion Mortgage Rules for Retirement vs Liquid Assets covers the retirement-account side in more detail.
Occupancy is the last check. The asset-based program here is a consumer mortgage for principal residences and second homes, with investment property only on the depletion path. A pure rental purchase generally belongs on DSCR.
Key Terms Defined
Liquid asset: Money that can be spent or drawn down without a sale, such as cash, savings or a brokerage balance.
Haircut: The share of a balance a lender discounts when counting it toward qualification.
Seasoning: The period an account balance must be on statements before the lender counts it.
Depletion divisor: The number of months, 60 here, used to turn usable assets into monthly qualifying income.
Vesting: How title to a property is held, whether personal, trust or LLC.
The Verdict
Pick liquid assets if your money is already in accounts. The file is shorter, the haircuts are known and the path is clear. Pick the equity route only if you accept a conversion step and its timing, and if a rental is the goal, compare DSCR before you assume an asset-based loan is the right tool.
Most files sit between the two. Sort your assets, subtract the cash you need for the deal, then see which path the remainder supports. Programs change and every file is underwritten individually, so the figures above are ceilings and floors, not offers. This article is not legal or tax advice. Consult a qualified professional, such as an attorney or CPA, about your own situation. Tax treatment varies, and a qualified professional can say how it applies to you.
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. As a broker, it arranges these loans through select programs in its wholesale network. Consumer lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington.
Frequently Asked Questions
Does home equity count toward an asset depletion mortgage?
Only in limited form. On the depletion path, real-estate equity counts at 60%, subject to underwriting. On the qualifier path it is not part of the credit percentages. Cash-out proceeds never count as qualifying assets on the depletion path.
Can I borrow against my home and use that money to qualify?
Borrowed or pledged funds are not published as eligible on either path. The documented route is converting funds to a seasoned cash balance in a regulated account, with the source reviewed by the lender. Treat it as a case-by-case question.
Do retirement accounts count?
Yes, at a discount. On the qualifier path a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path retirement accounts count at 70% at any age.
What if most of my wealth is in real estate?
You have three routes: sell, convert equity to seasoned cash, or use DSCR for a rental purchase. DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Some select lenders in the network will review sub-1.00 coverage, though leverage and terms adjust.
Do I still need to document my assets?
Yes. Statements are required on both paths. The qualifier path asks for 60 days of seasoning and two months of statements per account. The depletion path asks for statements at least 120 days old plus one within 45 days.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. 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: Does Real Estate Equity Count on an Asset Qualifier Mortgage? · Asset-Based Mortgage vs Family Loan for a Buyer With Assets and No Income · Can You Get an Asset-Based Mortgage on a Condo?
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.