Asset Depletion Loans: Mortgages for High-Net-Worth Borrowers
You have the money. Your bank accounts, brokerage statements, and retirement funds prove it. But because that money isn't flowing in as a W-2 paycheck, traditional lenders won't count it.
You have the money. Your bank accounts, brokerage statements, and retirement funds prove it. But because that money isn't flowing in as a W-2 paycheck, traditional lenders won't count it.
An asset depletion mortgage fixes this. It converts your liquid assets into a qualifying monthly income figure, letting you buy or refinance a home based on your net worth rather than your paycheck.
How Asset Depletion Works
The concept is straightforward: if you have enough assets to cover your mortgage payments for the life of the loan, you can qualify.
The Calculation
Step 1: Total your eligible liquid assets Step 2: Subtract your down payment and closing costs Step 3: Divide the remaining balance by 360 months (30-year loan term) Step 4: The result is your qualifying monthly income
Example
| Component | Amount |
|---|---|
| Checking and savings accounts | $500,000 |
| Brokerage/investment accounts | $1,200,000 |
| Retirement accounts (age 62, 100% eligible) | $800,000 |
| Total eligible assets | $2,500,000 |
| Minus: down payment and closing costs | ($400,000) |
| Net qualifying assets | $2,100,000 |
| Divided by 360 months | |
| Qualifying monthly income | $5,833 |
In this example, the borrower qualifies as if they earn $5,833 per month, or $70,000 annually. This income figure is then used to determine how much home they can afford based on standard DTI ratios.
Which Assets Qualify?
Not all assets are treated equally. Here's how lenders typically categorize them:
100% Eligible
- Checking accounts
- Savings accounts
- Money market accounts
- Brokerage and investment accounts (stocks, bonds, mutual funds)
- Certificates of deposit (CDs)
Partially Eligible
- Retirement accounts (under age 59.5): Approximately 70% of the value counts. The reduction accounts for early withdrawal penalties and taxes.
- Retirement accounts (age 59.5 and older): Up to 100% of the value counts, since withdrawals can be made without penalty.
Generally Not Eligible
- Real estate equity (unless liquidated)
- Business equity or ownership value
- Personal property (vehicles, art, jewelry)
- Restricted stock or unvested options
- Life insurance cash value (varies by lender)
Who Benefits from Asset Depletion?
Retirees
You've spent decades building a retirement portfolio. Now you want to buy a vacation home, downsize, or relocate. Your assets are substantial, but your "income" on paper is limited to Social Security and maybe a pension. Asset depletion lets your savings do the qualifying.
High-Net-Worth Individuals
Some people simply don't need a traditional paycheck. They live off investments, trusts, or accumulated wealth. Asset depletion recognizes this financial reality.
Business Owners Who Take Minimal Salary
Some business owners reinvest profits rather than paying themselves a large salary. Their personal tax returns may show modest income, but their personal asset accounts tell a different story.
Recently Retired Professionals
Doctors, attorneys, and executives who recently retired may not yet be drawing from retirement accounts. Asset depletion bridges the gap between career income and retirement withdrawals.
Seasonal or Variable Income Earners
Some high earners work seasonally or take extended breaks between engagements. During off periods, their income documentation is thin, but their assets remain strong.
Requirements
| Requirement | Typical Guidelines |
|---|---|
| Minimum credit score | 620 (680+ for best rates) |
| Down payment | 10% to 20% |
| Minimum assets | Enough to generate qualifying income for the target loan amount |
| Self-employment history | Not required |
| Income documentation | Asset account statements (2-3 most recent months) |
| Reserve requirements | Varies by lender |
| Property types | Primary residence, second home, investment property |
Asset Depletion vs. Other Programs
| Feature | Asset Depletion | Bank Statement | Conventional |
|---|---|---|---|
| Qualification basis | Liquid assets | Bank deposits | W-2/tax income |
| Self-employment required | No | Yes (typically) | No |
| Income documentation | Asset statements | 12-24 mo. statements | Tax returns, W-2s |
| Best for | Wealth without income | Income without tax proof | Traditional employees |
| Min. credit score | 620 | 620 | 620 |
| Down payment | 10-20% | 10%+ | 3-5%+ |
Rates and Terms
Asset depletion mortgages are non-QM products, so rates run slightly higher than conventional loans. Expect:
- Interest rates: 0.5% to 1.5% above conventional rates
- Loan terms: 15-year and 30-year fixed, adjustable-rate options
- Loan amounts: Up to jumbo limits (varies by lender)
- Property types: Primary residence, second home, investment property
Case Study Examples
Example 1: Retired Executive
Situation: A 65-year-old retired executive wants to purchase a $600,000 home. She has $3 million in liquid assets and retirement accounts, but her only income is $2,400/month in Social Security.
Traditional lender result: Denied. Social Security alone doesn't support a $600,000 purchase.
Asset depletion result: Approved. After subtracting the $120,000 down payment and closing costs, $2,880,000 in assets divided by 360 months yields $8,000/month in qualifying income. Combined with Social Security, she qualifies comfortably.
Example 2: Business Owner Between Ventures
Situation: A 52-year-old entrepreneur recently sold his business and has $1.8 million in cash and investments. He's taking time before his next venture, so he has no current income.
Traditional lender result: Denied. No current employment or income.
Asset depletion result: Approved. After down payment and costs, approximately $1.4 million in assets divided by 360 yields roughly $3,889/month in qualifying income. Sufficient for a moderately priced home in the Midwest.
Available in Michigan, Ohio, and Indiana
Asset depletion loans are available through Ultimate Mortgage Brokers across all three states. Whether you're purchasing a primary residence in Birmingham, Michigan, a second home near Lake Erie in Ohio, or an investment property in Indianapolis, our team can structure an asset depletion loan that fits your financial profile.
Learn more about all self-employed mortgage options →
Take the Next Step
If your assets tell a stronger financial story than your income, an asset depletion loan may be the right fit. Our team specializes in structuring these loans for high-net-worth borrowers across the Midwest.
- Talk to an asset depletion specialist → who can review your financial profile
- Get pre-approved → based on your assets, not your paycheck
Ultimate Mortgage Team
Expert mortgage brokers dedicated to simplifying your home financing journey.
💡 Frequently Asked Questions
The basic formula is: (Total eligible assets minus down payment and closing costs) divided by 360 months equals your qualifying monthly income. For example, $1,500,000 in eligible assets divided by 360 equals $4,167 per month in qualifying income.
Cash and liquid investment accounts count at 100% of their value. Retirement accounts count at approximately 70% if you are under 59.5 years old, and up to 100% if you are 59.5 or older. Real estate equity and other illiquid assets generally do not qualify.
Ideal candidates include retirees with substantial savings, high-net-worth individuals with investment portfolios, business owners who take minimal salary, and anyone with significant liquid assets but limited or irregular traditional income.
Most asset depletion programs require a minimum credit score of 620, with better rates available for scores of 680 and above.