Retirees
Plenty of savings, modest income on paper. Social Security and a pension may not cover the qualifying math on their own, but your accounts can.
Asset depletion loans: qualify on what you've saved, not a paycheck.
You spent decades building savings, a brokerage account, and a retirement fund. Then you retired, or sold the business, or simply stopped needing a salary, and a regular mortgage application asks for pay stubs you don't have. An asset depletion loan lets your assets do the qualifying. Here's how it works, who it's for, and what to send me.
Who it's for
High-net-worth borrowers
People whose wealth sits in investments and who don't draw a salary, or whose tax returns understate what they could easily afford.
Between careers
Recently sold a business, took a break, or are starting something new. No steady paycheck yet, but real money in the bank.
Inheritance or a big liquidity event
An inheritance, a legal settlement, or the sale of a company. The money is there; the pay stubs aren't.
How it works, in plain English
The idea is simple. Instead of asking "what do you earn each month," the lender asks "if you had to live on your assets, how much could you draw each month?" That figure becomes your qualifying income. Some lenders call it asset depletion, others call it asset utilization. Same idea.
- 1. Add up eligible assets Checking, savings, brokerage, retirement, and similar accounts, documented with recent statements.
- 2. Apply any discounts Some accounts count at less than full value. Stocks can swing in value, and retirement accounts can carry taxes and penalties if you pull money out early.
- 3. Set aside what the purchase needs The money for your down payment, closing costs, and required reserves comes off the top. It can't do double duty.
- 4. Spread the rest over time The remaining balance is divided over a number of months set by the program. The result is treated as monthly income.
- 5. Qualify like any other loan That income, plus any other documented income, is compared with your debts and the new house payment to get your debt-to-income ratio.
You don't actually have to spend your money down on that schedule. It's a measuring stick for the federal ability-to-repay rule, which still applies. The lender has to make a good-faith determination that you can repay, and this is how they do it when your income comes from assets.
Which assets count
Usually count
Checking and savings, money market accounts, CDs, brokerage accounts with stocks, bonds, and mutual funds, and retirement accounts like 401(k)s and IRAs, often at a discount.
Usually don't
Equity in real estate, business assets, cars, collectibles, and anything that's hard to sell quickly or hard to value. Crypto depends on the program.
Lenders want to see the money has been yours for a while, so expect a few months of statements and questions about large recent deposits. If you just moved money between institutions, keep the paper trail. If you're expecting a deposit, like proceeds from a home sale, tell me so we can time it.
Combine it with other income
Asset income usually doesn't have to stand alone. Social Security, a pension, annuity payments, rental income, or part-time work can usually be added on top, as long as it's documented. For a lot of retirees, a modest Social Security check plus asset income gets the numbers where they need to be with assets to spare.
What it can be used for
- Your primary residence The home you'll live in. Downsizing after the kids are gone, moving closer to them, or building the place you've been planning for years.
- Purchase or rate-and-term refinance Buy a home, or refinance your current loan to a new rate or term. Cash-out refinances generally aren't available on asset depletion programs.
- Bigger loans too Asset-based qualifying also comes up on bigger loans. See jumbo loans for loans above the conforming limit.
Other ways to qualify, for comparison
Asset depletion isn't the only route. If you have retirement income that's large enough, a conventional loan using that income is usually cheaper. If you still run a business and your returns understate it, a bank statement loan may fit better. And sometimes paying cash for part of the house and financing the rest changes the math entirely. I'll run the options side by side, starting with the cheapest one you qualify for.
Tradeoffs
- Pricing Usually higher than a conventional loan. That's the trade for not needing a paycheck.
- The assets have to stay put The money you qualify with needs to stay in the accounts through closing. Don't reshuffle your portfolio mid-loan without telling me.
- Market swings matter If your brokerage account drops a lot before closing, the numbers can change. Updated statements may be needed.
- Talk to your advisor Tying up or drawing on assets has tax and planning effects. I handle the loan. Your financial advisor and CPA handle the rest.
Retiring around DFW
A lot of my asset depletion clients are moving closer to family: into Fort Worth near the grandkids, or out to Aledo and Parker County for a little more room. Wherever you're headed, the process is the same. Send me the statements and the address, and I'll tell you how it looks.
What to send me
- Recent statements for every account you want counted, all pages
- Social Security award letter, pension statements, or other income documents
- Your most recent tax return, so I can check whether a conventional loan works
- A note on any recent large deposits and where they came from
- Where you're buying and roughly the price, or your current mortgage statement for a refinance
How to start
Send the short form, call, or email. Tell me roughly what you have in savings and investments, any income you receive, and what you're buying. I'll tell you whether asset depletion fits and what I need next.
Phone: 817-873-6288
Email: [email protected]
Asset depletion questions
What is an asset depletion loan?
An asset depletion loan is a mortgage where your savings and investments are turned into a monthly income figure for qualifying, instead of using a paycheck. It's also called asset utilization or asset-based qualifying.
How is income calculated on an asset depletion loan?
The lender totals your eligible assets, subtracts what you need for the down payment, closing costs, and reserves, and divides the rest over a number of months set by the program. The result is treated as monthly income. Some account types count at less than full value.
Who is an asset depletion loan for?
Retirees, high-net-worth borrowers, people between careers, people who recently sold a business, and anyone with substantial assets but little regular income on paper.
Which assets count?
Usually checking, savings, money market, CDs, brokerage accounts, and retirement accounts. Stocks and retirement funds often count at a discount. Business assets, real estate equity, and hard-to-sell assets usually don't. The details depend on the program.
Can I use asset depletion for a cash-out refinance?
Generally no. Asset depletion loans are for a primary residence, either a purchase or a rate-and-term refinance.
Can I combine assets with Social Security or a pension?
Often, yes. Documented income like Social Security, a pension, or annuity payments can usually be added to the asset-based income figure.
Do I have to spend down my assets?
No. The calculation is a way to measure your ability to repay. You don't have to withdraw anything on that schedule. You do need to keep the assets you're qualifying with in place through closing.
Is an asset depletion loan more expensive?
Usually somewhat, compared with a conventional loan. If your other income already qualifies you conventionally, that's usually the better deal, and I'll check it first.
Subject to qualification and program guidelines. Not all applicants will qualify. Not a commitment to lend.
More programs in the non-QM loan guide, or the FAQ page. Or head back home.