The Quick Read: Retiring does not close the door on a refinance, because select asset-based programs in Lendmire’s wholesale network qualify the loan on your documented balances instead of a paycheck. One path uses your assets to cover the entire loan. The other converts your assets into a monthly qualifying income. Your statements, credit and the property still get a full review, subject to underwriting.
- Asset qualifier path: eligible assets must equal or exceed the whole loan, and no income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income that must carry your debts.
- You are qualified on one path at a time, never a blend of the two.
- Assets are fully documented on both paths. Only the income documentation goes away.
- A rental property you own is usually a different loan, covered near the end.
Which Path Fits a Retired California Homeowner?
Start with one question: are your balances big enough to cover the loan outright, or only big enough to produce income? That answer picks the path. Both are consumer mortgages for a principal residence or second home, and the depletion path also reaches investment property, subject to lender guidelines.
Picture a retired couple in California with a paid-up brokerage account, a large IRA and a pension that barely shows on their tax return. A standard income test reads that file as thin. An asset-based program reads it as strong. The balances are the story, so the program is built around them.
Most conventional files lean on pay stubs and traditional personal-income documentation, so retirees often get steered wrong early. A retiree drawing down accounts can show modest taxable income while holding seven figures. These programs exist for that mismatch. They suit retirees, early-retired professionals, people who sold a business, and households living on inheritance or settlement money.
Path One: Assets Cover the Whole Loan
On the asset qualifier path, your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Through select programs, leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Loans go up to $4,000,000, subject to underwriting.
Here is how much of each balance counts on this path:
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% if you are under age 59½, and 100% at 59½ or older.
- Accounts combine, so several statements can add up to one qualifying total.
Credit needs a 600 minimum score on this path, and the lender’s review of the file rests on your assets. Reserves are not required at or below 75% loan-to-value, which is the loan balance as a share of the home’s value. Above that, the lender sets them.
Seasoning is the waiting period that proves money is really yours. Here it means 60 days of history and two months of statements for each qualifying account.
Run the numbers on this sanctioned shape. Take an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000). You hold $300,000 in a 401(k) while under 59½ (90% counts, so $270,000). You hold $200,000 in savings (100% counts, so $200,000). That is $800,000 of usable assets, which meets the loan on assets alone. The lender’s own calculation governs, and this is illustrative only.
Cash-out proceeds on this path are set by the lender and not published, so treat any cash-out request as a conversation, not a given.
Path Two: Assets Become Your Income
On the asset depletion path, eligible assets are reduced by a haircut, then divided by 60 months. The result is a monthly qualifying income. That income must carry your full housing payment and other debts through the debt-to-income test. Debt-to-income is simply your monthly debts compared with your monthly qualifying income.
A haircut is the share of a balance the lender will not count. Here is what counts on this path:
- Cash accounts and certificates of deposit: 100%.
- Securities: 80%.
- Private stock: 75%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
Several things do not count at all: 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.
Here is the sanctioned example. You hold $1,500,000 in securities, and 80% counts, so $1,200,000. You also hold $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 figure then carries the housing payment and other debts through the debt-to-income test. It is illustrative, and the lender’s own calculation governs.
Leverage on the depletion path depends on the property and the purpose of the loan:
| Property | Purchase or rate-and-term | Cash-out |
|---|---|---|
| Principal residence or second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
Loans run from $125,000 to $3,500,000. Cash-out proceeds never count as qualifying assets. The lender’s score-and-loan-amount matrix sets the credit floor. A first-time investor on this path needs a 700 score.
Minimum assets are the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you also need at least $250,000 in liquid assets. If you do have other income, such as a pension, asset-derived income can supplement it up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Statements must be at least 120 days old at application, plus one statement dated within 45 days. Funds from a business sale, inheritance or legal settlement are excused from that seasoning.
Which Retiree Profile Fits Which Path?
The honest answer is that the profile decides. This table matches the common retiree situations to a path and the main tradeoff.
| Retiree profile | Likely path | Main tradeoff |
|---|---|---|
| Large balances, small loan | Asset qualifier | Needs assets at or above the full loan |
| Large balances, big loan | Asset depletion | Haircuts shrink what counts |
| Pension plus big portfolio | Depletion, supplemental | Debt-to-income cap applies |
| Mostly retirement accounts | Qualifier, if over 59½ | Under 59½ counts at 90% |
| Wants cash out | Depletion | Lower leverage, and proceeds do not count |
This one is a toss-up in the middle rows. A retiree over 59½ with a modest loan usually finds the qualifier path simpler. A retiree with a large loan relative to assets gets pushed to depletion, where the 60-month math is the gate.
How Underwriting Treats Your File, Step by Step
Underwriting reviews your file one piece at a time. Here is the sequence across most programs in the network.
1. Classify the property and the purpose. Your own home or second home sits in a consumer lane. A rental you own sits in a different one, covered below.
2. Pick the path. The lender tests assets against the loan first, then falls back to depletion if the balances fall short.
3. Gather statements. Each qualifying account needs the statement history the path calls for.
4. Check credit. The lender reviews score and housing payment history, which is typically 0x30x12 (one 30-day late in the last twelve months is considered case by case).
5. Order the appraisal. Value sets the leverage ceiling.
6. Review the source of funds. Large deposits get explained.
Multiple bankruptcies are not eligible. A housing event, such as a foreclosure, needs 4 years of seasoning on the depletion path.
The Legal Frame Behind Asset-Based Lending
Since this is a consumer mortgage on your home, the lender must make a reasonable repayment-ability decision. The rule behind that lets a lender consider your “current or reasonably expected income or assets,” and it excludes the value of the home itself. See 12 CFR 1026.43 at Cornell LII. Your balances must be verified with reasonably reliable third-party records. Employment status matters only when a lender relies on employment income.
That explains why home equity alone does not prove you can repay. It also explains why statements matter on both paths. Equity can still count as an asset on the depletion path, at 60%, but it is only one input.
Where the General Rule Breaks
These are the places where retirees get surprised.
Your rental is a different loan. Business-purpose loans on non-owner-occupied rentals are reviewed differently from a standard owner-occupied mortgage, and the CFPB’s business-purpose rule generally treats credit for such a rental that way. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s explainer Can a Retiree With No W-2 Income Get a DSCR Loan? covers that lane. The complete DSCR loans guide covers the mechanics, including that select programs in the network review coverage below 1.00 with adjusted leverage and terms.
A big portfolio is not rental income. On a DSCR file the portfolio supports credit strength and reserves, not coverage.
Crypto, metals and collectibles do not count. Neither path publishes them as eligible. The documented route is selling them into a seasoned cash balance in a regulated account, with the lender reviewing the source. Pledged or borrowed funds do not count either.
Cash-out is stricter. On the depletion path, cash-out leverage drops to 60% on every property type. A retiree with huge balances can still be limited here.
A W-2 spouse changes the picture. A working co-borrower brings documented income to the file. Lendmire’s piece Can a W-2 Spouse Carry the Mortgage Without Self-Employed Income? covers how that interacts with the other borrower’s lack of income.
Low tax-return income is not a dealbreaker. Rollovers and deferred withdrawals can make a rich file look poor on paper, which is exactly what these programs are built to read past. Tax treatment varies; consult a qualified professional.
Is Refinancing Even Worth It?
Sometimes the right move is not to refinance. A refinance resets your term and carries closing costs, so the savings have to outweigh both. Ask what you gain: a lower obligation, a shorter term, or cash for a specific need.
Alternatives are worth a look. A home equity line keeps your first mortgage untouched. A reverse mortgage is its own product with its own rules. Neither is the program described here. Compare them on cost, flexibility and what happens to your balances.
California adds its own weight. Property taxes and insurance feed your housing payment and your debt-to-income ratio, and they vary by county. The program figures above do not change by state, but your housing payment does.
Timing: Before or After You Retire?
Refinancing before you retire lets a paycheck back the file, but it limits you to income-based tests. Refinancing right after you retire is exactly what asset-based programs are for, because your balances are already seasoned. Waiting for distributions to build a history helps only if you plan to use income-based tests. On the asset paths, statement age matters more than payment history.
Common Mistakes to Avoid
- Moving money between accounts right before you apply, which resets the statement clock.
- Assuming every asset counts at face value. Haircuts apply on the depletion path.
- Counting cash-out proceeds as qualifying assets. They never count.
- Picking a path by habit rather than by the numbers.
- Treating a rental like a personal residence in the application.
Key Terms Defined
Asset qualifier path: The program route where eligible assets must equal or exceed the entire loan, with no income documented.
Asset depletion path: The route where usable assets divided by 60 months become a monthly qualifying income.
Haircut: The share of an asset balance a lender does not count toward qualifying.
Seasoning: The waiting period that shows funds are truly yours, measured through statement history.
Debt-to-income: Your monthly debts as a share of your monthly qualifying income.
Loan-to-value: The loan balance as a share of the property’s appraised value.
Frequently Asked Questions
Can a lender deny me because I am retired?
Being retired is not a reason to be turned down. What decides the file is whether your documented assets or income support the loan, plus credit and the property. A denial usually traces to documentation or the debt-to-income test, not to retirement.
Do I need a job or W-2 to refinance?
Not on these paths. Employment matters only when a lender relies on employment income. The qualifier path documents no income at all, and the depletion path builds income from your balances. Subject to underwriting, through select programs.
Can my 401(k) or IRA count?
Yes. On the qualifier path, it counts at 90% under 59½ and 100% at 59½ or older. On the depletion path, it counts at 70% at any age.
Can I take cash out when I refinance?
On the depletion path, yes, up to 60% on a principal residence, second home or investment property, and the proceeds never count as qualifying assets. The lender sets qualifier-path cash-out terms and does not publish them.
Does this work for a rental I own?
Usually not. A rental is typically financed as a business-purpose loan that is reviewed on property-level rental income, subject to lender guidelines. The depletion path can reach investment property at 65% on a purchase or rate-and-term refinance and 60% on cash-out.
Next Steps
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 licensed for consumer mortgage lending in 16 states, California among them, and works as a broker placing loans through select lenders. This is not a commitment to lend.
Run your statement dates before you run anything else, because a retiree whose balances are already seasoned in a California account has done most of the hard work.
Lendmire’s asset-based mortgage in California page presents the program for California borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. 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: Structured Settlement Payments vs Asset Depletion Income for a Mortgage · How Big Can an Assets-Only Mortgage Be? · How Asset Depletion Income Is Calculated From Your Portfolio
Guides: Asset-Based Mortgage in California
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.