An asset depletion mortgage lets a lender count your savings, investments, or retirement balances as monthly income. The lender divides your eligible assets over a set number of months, and the result goes into your debt-to-income ratio in place of pay stubs or tax-return income. If you have substantial assets but little documented income, this is one way to qualify. Duane Buziak, a mortgage broker, built Free Mortgage Search so you can compare these offers across hundreds of wholesale lenders through NoTouch Credit Pull, a soft-pull comparison that does not trigger a hard inquiry.
How Lenders Turn a Balance Into Monthly Income
The mechanic has three steps. First, the lender determines your eligible assets: verified balances after any valuation discounts (often called haircuts) and after subtracting the funds you need for the down payment, closing costs, and sometimes required reserves. Second, it divides that figure by a divisor, a repayment term in months set by the program or investor. Third, it counts the result as monthly income when calculating your debt-to-income ratio (DTI), which compares your monthly debts, including the proposed mortgage payment, to your monthly income.
A worked example
Suppose you have $900,000 in eligible assets and the purchase requires $120,000 for the down payment and closing costs. The calculation looks like this, using an illustrative 84-month divisor (actual terms vary by investor):
- $900,000 minus $120,000 = $780,000 in remaining qualifying assets
- $780,000 divided by 84 months = about $9,286 per month of qualifying income
- Proposed mortgage payment of $3,200 plus $600 in other monthly debts = $3,800 in total monthly obligations
- $3,800 divided by $9,286 = a DTI of about 41 percent
No paycheck appears anywhere in that math. The portfolio alone produces the income figure the underwriter uses.
Why two lenders can disagree
This is a calculation, not a judgment call, but the inputs belong to each investor. One investor might use a shorter divisor, which produces more monthly income from the same balance. Another might apply a heavier haircut to stock holdings, which shrinks the starting number. Run the same statements through two sets of guidelines and you can get two different qualifying incomes, and therefore two different maximum loan amounts. That is the reason to compare rather than accept the first answer you receive.
Which Assets Count and Which Get Discounted
Lenders typically consider checking and savings accounts, brokerage accounts, and mutual fund holdings. Some also allow retirement accounts such as IRAs and 401(k)s. Cash-like balances are usually counted at or near full value. Market-exposed assets are commonly discounted because their value can drop, and retirement funds are often discounted further to reflect taxes and withdrawal penalties. The size of those haircuts varies by investor and by program, so treat any single percentage you read online as a placeholder, not a rule.
Documentation and seasoning
Seasoning refers to how long funds have been in your account. Lenders usually ask for recent statements, commonly covering a couple of months, to confirm balances and history. If a large deposit appears shortly before you apply, expect to be asked where it came from. A paper trail such as a transfer from another account of yours or a documented sale of an asset resolves most of these questions. Exact statement periods and sourcing thresholds differ by lender, so confirm current requirements before you start collecting paperwork.
What generally does not count
- Borrowed funds. A loan against a portfolio or a cash advance is a liability, not an asset.
- Gift funds already earmarked. Money given to you for the down payment is generally spoken for and does not also generate income.
- Assets needed to close. Whatever you use for the down payment, closing costs, and any required reserves comes out of the pool before the divisor is applied, as the example above shows.
- Restricted or illiquid holdings. Assets you cannot readily access, such as certain locked-up accounts, may be excluded or discounted heavily.
Because ineligible assets are subtracted before the math begins, a large headline net worth can shrink quickly on paper. A realistic count of what is liquid and documented is more useful than your total balance sheet.
Asset Depletion vs. Other Ways to Qualify Without Standard Income
Asset depletion is one of several routes for borrowers whose tax returns or pay stubs do not tell the whole story. Each method uses a different definition of income and a different paper trail.
| Method | What the lender uses as income | Documentation | Typically suits |
|---|---|---|---|
| Asset depletion | Eligible assets divided over a set term | Account statements, sourcing of large deposits | Retirees, people between ventures, asset-rich buyers with irregular income |
| Bank statement loans | Average deposits into personal or business accounts, often adjusted for expenses | Typically 12 to 24 months of statements | Self-employed borrowers with strong cash flow but low taxable income |
| DSCR / investor loans | The rental property’s expected rent compared with its payment | Lease or rent estimate, property details | Investors buying rental property, not a primary residence |
| Conventional full-doc with Fannie Mae retirement/distribution income rules | Documented pensions, Social Security, and qualifying retirement distributions | Award letters, distribution history, tax returns | Borrowers whose income already documents cleanly |
One misconception is worth clearing up. Asset depletion does not mean you must spend down your savings. The formula is a qualification tool: it shows the underwriter your assets could support the payment. You keep your portfolio and are free to leave it invested.
Conventional loans have their own asset-based provisions. The Fannie Mae Selling Guide includes qualifying provisions that let some borrowers use retirement or other assets as income, with specific eligibility conditions. Those rules are more prescriptive than many non-agency programs, and pricing on a conforming loan can be more favorable when you meet them. Ask any lender you talk to whether your situation fits that route before moving to a non-agency product.
Who This Loan Fits, and Who Should Look Elsewhere
An asset depletion mortgage tends to fit three kinds of borrowers:
- Retirees with large portfolios and modest pension or Social Security income.
- Business owners between ventures who sold a company or are planning the next one and have liquid proceeds but no current paycheck.
- High-net-worth buyers with irregular income, such as those paid through investment returns, distributions, or lumpy compensation.
It is a poor fit when liquid assets are thin once the down payment and closing funds are removed, because the formula produces too little income to matter. It is also often the wrong tool if your income already documents easily. A salaried borrower with two years of clean returns will usually find a conventional loan more straightforward and often more favorably priced.
Trade-offs to verify
As of October 2026, many asset-based programs fall into non-QM (non-qualified mortgage) territory. That means they do not follow the standard ability-to-repay documentation path used for conventional loans. Non-QM loans can carry different rates, down payment minimums, and reserve requirements than conforming loans. Pricing differs by investor and moves with the market, so get actual figures in writing instead of relying on generalities.
Loan size also matters. For 2026, the Federal Housing Finance Agency (FHFA) set the baseline conforming loan limit at $806,500, with a ceiling of $1,249,125 in high-cost areas; limits vary by county. A loan above your area’s limit is a jumbo loan, which is priced and underwritten under different rules. Many asset depletion borrowers buy at price points where this distinction applies, so it is worth knowing which side of the line your loan amount falls on.
Why a Broker Comparison Matters More for Asset-Based Loans
On a standard conventional loan, most lenders compute income the same way, so the main differences are rate and fees. With asset-based qualification, the income itself changes depending on whose guidelines apply. The divisor, haircuts, and reserve rules are all investor-specific, so the same portfolio can support different loan amounts at different institutions. If you only look at one, you are guessing at how much house your assets can carry.
This is where the structure of the company you work with matters. Duane Buziak is a mortgage broker, which means he can place a loan with any of hundreds of wholesale lenders and match your profile to the guidelines that treat your assets most favorably. National direct lenders such as Rocket, Movement, and Guild originate loans through their own program menus, which can work well for many borrowers but means you see one set of guidelines. Neither model is wrong. They simply give you different amounts of choice.
| Dimension | Broker with wholesale access | Single-company shelf |
|---|---|---|
| Program access | Multiple investors’ asset-based programs | That company’s own programs |
| Asset income calculation | Can compare divisors and haircuts across investors | One divisor and haircut set |
| Pricing comparison | Multiple rate and fee structures from one search | One rate and fee structure |
| Fit for unusual profiles | Can redirect to a different investor if one declines | If the company’s guidelines do not fit, you start over elsewhere |
How the free tool works
Free Mortgage Search by Duane Buziak runs one search and uses NoTouch Credit Pull, a soft-pull comparison, so there is no hard inquiry and no obligation. Any rate or payment shown is an estimate based on stated assumptions, and the annual percentage rate (APR), which folds fees and points into the cost, can differ from the note rate. Treat estimates as a starting point until you receive a formal Loan Estimate.
Dare to Compare
When offers arrive, ask each one to be laid out side by side with the rate, APR, points, and fees. For this loan type, add one more line: how the lender calculates asset income, including the divisor and any haircuts. Two offers with similar rates can rest on very different income math.
Steps to Prepare Before You Compare
- Collect statements. Gather two to three months of statements for every account you might use, including brokerage and retirement accounts.
- Sort liquid from restricted. List what you can access freely and what carries penalties, lockups, or loan balances against it.
- Split your funds. Decide which dollars go to the down payment and closing costs and which remain as qualifying assets. Remember that the first group does not generate income in the formula.
- Run rough math. Subtract your cash-to-close, divide by a few plausible terms, and see what income and DTI result. The spread across those terms shows how sensitive your outcome is to the divisor.
- Request the method in writing. Ask each lender to show its divisor and haircuts, not just the final qualifying figure.
Then ask these questions of every offer:
- Is there a prepayment penalty, and for how long?
- What reserve requirements apply after closing?
- Is this a non-QM loan?
- How does the rate and APR compare with a conventional alternative, if I might qualify for one?
The Consumer Financial Protection Bureau also publishes mortgage shopping resources that explain how to read a Loan Estimate, which helps when you are comparing offers.
Asset Depletion Mortgage FAQ
Does comparing asset depletion offers hurt my credit?
Not through Free Mortgage Search. NoTouch Credit Pull is a soft-pull comparison, so it does not create a hard inquiry. A hard pull happens later, only if you decide to move forward with a specific loan.
Do I have to spend my assets?
No. The depletion formula is only used to calculate qualifying income. You are not required to withdraw or liquidate the assets, apart from funds you choose to use for the down payment and closing costs.
Can retirement accounts count?
Often, yes, though it depends on the investor. Retirement balances are frequently discounted more than cash or brokerage holdings, and the treatment varies by program.
Is there a minimum asset amount?
Most programs set one, but it varies by investor and changes over time. In practice the real test is whether your eligible assets, after the down payment and closing funds are removed, produce enough income to support the payment.
Can I combine asset depletion with employment income?
Some programs allow a blend of documented income and asset-derived income, while others require the asset calculation to stand alone. Ask each lender how it handles this.
Is it a non-QM loan?
Often, yes, as of October 2026. Some conventional guidelines allow limited use of assets as income, so confirm which category your offer falls into.
Are rates higher than conventional?
They can be, since non-QM pricing differs from conforming pricing, but it varies by investor, loan size, and your profile. That is why side-by-side comparison matters more than assumptions.
How long does approval take?
Timelines depend on how quickly you provide statements and source any large deposits, and on the investor’s underwriting process. Having documents ready before you apply is the most effective way to avoid delays.
Turning Verified Assets Into Qualifying Income
An asset depletion mortgage converts verified assets into qualifying income through math that each investor sets for itself. That is why the same portfolio can qualify for different amounts depending on who reviews it. Start a free, no-hard-pull comparison with Free Mortgage Search by Duane Buziak, then use Dare to Compare to line up rate, APR, points, fees, and asset-income method side by side.
Your dream home is within reach. Start comparing personalized mortgage rates from trusted lenders today and discover the loan solution that fits your budget and goals. Compare rates now and take the first step toward securing your home with expert guidance every step of the way.
