Asset-Depletion Mortgage

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An asset depletion mortgage allows borrowers to qualify for a mortgage based on their liquid assets rather than their income. Thus, the borrower will not provide tax returns to be eligible for the mortgage. An asset-based mortgage is excellent for someone who is purchasing a home with little income but significant assets such as funds in a checking account, investment account, or retirement account.

What Types of Assets Can A Borrower Use to Qualify?

Assets refer to liquid funds that can be liquidated (converted to cash or cash equivalents) within 30 days.

  • Stocks
  • Bonds
  • Checking or savings account funds
  • Retirement account funds

How Does an Asset Depletion Mortgage Work?

Typically, the mortgage underwriter will divide the total assets being used to qualify by 360 months (total number of months in a 30-year mortgage). The final number helps the underwriter evaluate your monthly liquid funds, determining what payment size you can handle each month.

What are the Requirements for an Asset Depletion Mortgage?

The borrower must meet the following requirements to qualify for an asset-based mortgage:

  • Must have at least two times the desired loan amount in assets
    • For example, if you are requesting a loan for $100,000, you must have at least $200,000 in assets.
  • Must be of retirement age to qualify based on retirement funds.
  • Subject property must be a primary home, second home, or investment property

Why Work with GuardHill for an Asset Depletion Mortgage

GuardHill has over 28 years of mortgage financing experience and specializes in providing out-of-the-box financing solutions to help borrowers from all walks of life achieve their financing and homeownership goals. Our goal is to make the mortgage process easy for all parties involved.