By Matt Allen
Vice President, Portfolio Lending (NMLS #415037)

What is an Asset Depletion Mortgage?

Nov 13, 2023

  • Non-QM Loans
  • Portfolio Loans
  • Non-conforming Loans

Most home loan lenders use the borrower’s source of income as a qualifier to get a mortgage. But what if you’re retired or live off your assets instead of employed?

An asset depletion mortgage, or an asset dissipation loan, is a non-QM loan that allows borrowers to use their substantial assets to qualify for a mortgage loan instead of employment income.

Qualifying assets include money market accounts, checking or savings accounts, certificates of deposits, retirement accounts (such as 401K or IRA), or investment accounts such as stocks, bonds, and mutual funds. Borrowers that can benefit from an asset-based loan include those who are self-employed with insufficient verifiable income, retirees with low verifiable fixed income, or individuals with many assets in the U.S.

Monthly qualifying income can be determined using a percentage of different types of assets. For stocks, bonds, and retirement funds, borrowers can use 70%, and for cash accounts, they can use 100%.

Some lenders will have minimum age requirements for retirement accounts and minimum and maximum loan amounts. The rules for an asset-based mortgage can change depending on the borrower's financial situation.

To determine if an asset-based mortgage loan is right for you, contact our NASB experts. You can contact us at 855-921-4921 or click here for additional information.