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Asset-Based Mortgages: Your Savings Are Your Income
An asset-based mortgage (often called asset depletion) turns your savings into qualifying income on paper — no paycheck required. It solves the classic retiree paradox: you have $900,000 across retirement and brokerage accounts, your house is paid off, you've never missed a bill in your life — and the bank says no, because "no employment income." Asset depletion lenders look at what you have instead of what you're paid.
How the math works
The lender takes your eligible assets and spreads them over a fixed schedule to create a monthly "income." A common approach divides post-down-payment assets by a term like 360 months (some programs use shorter schedules, which produce a higher qualifying income). Simplified example:
- $800,000 in eligible assets after your down payment
- ÷ 360 months → roughly $2,200/month of qualifying income
- Added on top of Social Security or pension income you already receive
Two important comforts: you never have to actually withdraw the money on that schedule — it's a qualification method, not a payment plan — and your accounts stay where they are; you're documenting balances, not moving funds.
Which assets count
- Checking, savings, money market, and CDs — usually counted in full
- Brokerage accounts — often counted at a discount (commonly around 70–80% of value) to allow for market swings
- Retirement accounts (IRA, 401k) — typically discounted similarly; some programs require you to be 59½ for full credit
- What generally doesn't count: home equity in other properties, business assets, crypto (varies widely by lender)
Who this fits
- Retirees buying closer to family, downsizing, or relocating — without liquidating investments and triggering a tax bill
- People between chapters: sold a business, took a package, living off savings
- High-net-worth borrowers whose wealth is in portfolios, not pay stubs
The honest part
Asset-based pricing typically runs somewhat above conventional rates, and down payments tend to start around 10–20% depending on the program and credit. If your Social Security plus pension alone can qualify you conventionally, that's usually the cheaper path — a good specialist will check that first rather than sell you the fancier product. That's exactly the kind of straight answer we match for.
Frequently asked questions
What is an asset depletion mortgage?
A loan that converts savings and investment balances into qualifying monthly income — typically by dividing eligible assets over a set number of months. No employment required.
Do I have to withdraw money each month?
No. The division is purely how the lender qualifies you. How you actually make the payment — dividends, Social Security, withdrawals on your own schedule — is your business.
Which accounts count?
Bank accounts in full; brokerage and retirement accounts usually at a discount (often ~70–80%). Rules vary by lender — this is where a specialist earns their keep.
Is this the same as a reverse mortgage?
No. This is a standard forward mortgage with normal monthly payments — your equity isn't consumed. A reverse mortgage (HECM) is a different product for 62+ homeowners; a good specialist can compare both honestly if you're weighing them.