The Quick Read: A pledged asset line borrows cash against your portfolio to fund the purchase, while an asset qualifier mortgage counts the portfolio toward approval without pledging it, so the first supplies money and the second supplies qualification for the home loan itself. Ohio changes neither product. The state is simply where the house sits. Program figures below are typical ranges through select programs in Lendmire’s wholesale network, subject to underwriting.
- A pledged asset line (PAL) is a credit line, not a mortgage. You still need a mortgage on top of it.
- An asset qualifier mortgage is the mortgage. Your assets stay in your accounts and are not pledged.
- A PAL adds a callable, market-linked debt. An asset qualifier adds no new debt.
- Both suit portfolio-rich, income-light buyers. They solve different problems.
- The two can be combined, but borrowed funds are a sticking point (covered below).
The Honest Answer on Who Each One Is For
Choose a PAL if your problem is cash. You have a large taxable portfolio, you do not want to sell and trigger a taxable event, and you need money for a down payment or a bridge. You also need a way to qualify for the mortgage that follows.
Choose an asset qualifier mortgage if your problem is documented income. You are retired, you sold a business, you received an inheritance or settlement, or you live off a portfolio. Your balances are big and your traditional personal-income documentation looks small.
Many buyers in the second group do not need the first product at all. Some in the first group find that a PAL solves the cash question but leaves the approval question open.
Side-by-Side
The asset qualifier column reflects the path Lendmire places through select lenders.
| Factor | Pledged Asset Line | Asset Qualifier Mortgage |
|---|---|---|
| What it is | Revolving credit line on a portfolio | Mortgage underwriting method |
| Review basis | Collateral value and lender eligibility | Eligible assets cover the whole loan |
| What secures it | Pledged taxable securities | The purchased property |
| Documentation | Account statements, pledge agreement | Account statements, no income documented |
| Property types | Proceeds can fund most purchases | Primary home or second home |
| Entity vesting | Account owner borrows personally | Individual borrower, consumer purpose |
| Reserves | Extra collateral if values fall | None at 75% LTV or below |
| If markets fall | Lender can call for collateral | No margin-call mechanism |
| Best fit | Needs cash without selling | Needs approval without income |
A few notes on that table. The asset qualifier column describes the qualifier path: eligible assets must equal or exceed the entire loan. A second route, asset depletion, turns assets into monthly income and also covers investment property. That route is discussed below.
What Each One Actually Is
A PAL, also called a securities-backed line of credit, is a revolving credit line secured by a brokerage portfolio. FINRA describes it as a loan against an investment account so the investor does not have to sell. Proceeds can fund almost anything except buying more securities, and that includes real estate.
The SEC/FINRA investor alert adds the structure: interest-only monthly payments, and a balance that stays outstanding until repaid. It also says you can keep trading inside the pledged accounts.
An asset qualifier mortgage works differently. The property secures the loan. Your assets only prove you can repay. The lender applies a credit percentage to each account type, and the eligible total must cover the entire loan amount.
One naming warning. Some lenders use “asset qualifier” and “asset depletion” as synonyms. Across the wholesale network they are two separate structures, and a borrower is qualified on one path at a time. This article names the path whenever a figure appears.
How the Asset Qualifier Path Counts Your Money
On the qualifier path, the credit percentages are simple. Brokerage accounts, certificates of deposit, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Here is an illustration, and the lender’s own calculation governs. Take an $800,000 loan. You hold $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets. The file is reviewed on assets alone, with no employment or income documented.
Other terms on the qualifier path, all subject to underwriting:
- Leverage runs up to 80% on a purchase and 75% on a refinance.
- Loan amounts reach $4,000,000.
- The credit floor is 600.
- Assets need 60 days of seasoning, with two months of statements per account.
“No income documented” never means “no documentation.” The assets are documented in full.
When a Pledged Asset Line Is the Better Fit
A PAL earns its place when liquidity is the real obstacle and the portfolio is large and stable.
You need cash and do not want to sell. The alert notes that a PAL avoids selling holdings, which may carry unintended tax consequences. Tax treatment varies; consult a qualified professional.
You already qualify for the mortgage another way. If a buyer has documented income that carries the loan, a PAL can fund the down payment without a sale. The line supplies cash only. It does nothing for approval.
You want flexibility on what you buy. Because proceeds are not tied to one property type, a PAL can fund a primary home, a vacation home or a rental. An asset qualifier mortgage on the qualifier path is limited to a primary home or second home.
Your portfolio is diversified. A single concentrated holding can trigger trouble even when the broader market is calm. A broad, taxable portfolio handles a line better.
The cost of that flexibility is real. A PAL is typically uncommitted, so the lender can demand repayment. The alert warns that a firm can decide a security is no longer eligible collateral. The credit limit then drops, and you may have to post more assets. The Federal Reserve likewise notes that borrowers can be asked to replenish collateral when the portfolio falls below a threshold.
Rental income does not service a PAL by default either. If the Ohio house will be a rental, you carry two obligations: the line and the mortgage.
When an Asset Qualifier Mortgage Is the Better Fit
This is the cleaner tool when approval, not cash, is the bottleneck.
Your income is thin on paper. Retirees, business sellers and portfolio households often show modest returns against very large balances. The qualifier path ignores employment and looks at what you own.
You hold the cash for the purchase already. The mortgage needs eligible, seasoned assets that equal or exceed the whole loan. Funds you plan to put down and spend at closing do not also count toward that coverage.
You want no margin-call risk. Nothing is pledged. Your accounts keep working, and no lender can call them. Eligible balances do need to stay documented through closing.
You are not leaning on retirement money alone. Retirement balances count on the qualifier path, at 90% under 59½ and 100% after. They do not work as PAL collateral, since pledged collateral is generally taxable securities.
Where it fits less well: the qualifier path needs assets large enough to cover the whole loan. If your portfolio is half the loan size, look at the depletion route or another program.
The Depletion Route
The asset depletion path divides usable assets by 60 months. The result is monthly qualifying income, which then runs through the debt-to-income test.
The haircuts differ from the qualifier path. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
Run the numbers on a sample file. $1,500,000 in securities (80%, so $1,200,000) plus $300,000 in cash (100%) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. That income must carry the housing payment and other debts. Illustrative only.
Depletion-path terms, through select programs:
- Loans range from $125,000 to $3,500,000.
- Leverage is up to 80% on a primary residence or second home purchase or rate-and-term refinance, and 60% on cash-out.
- On an investment property, leverage is up to 65% on a purchase or rate-and-term refinance and 60% on cash-out.
- Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan.
- Liquid assets never fall below $250,000 when depletion is the only income source.
- Credit follows the lender’s matrix, and a first-time investor needs a 700.
- Asset statements must cover at least 120 days, with the most recent one dated within 45 days.
Cash-out proceeds never count as qualifying assets. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and unvested restricted stock are not eligible.
Can You Use Both?
Sometimes, but this is where buyers get tripped up. The honest answer is that it depends on the lender.
Borrowed or pledged funds are not published as eligible assets on either path. A PAL draw is borrowed money, so counting it toward qualifying assets or reserves is a problem. If the draw covers a down payment, the lender decides whether and how that source is accepted.
A second question follows. Securities pledged to a PAL are encumbered, and the drawn balance is a new liability. Whether a pledged account counts at all for asset-based qualification is a question for your loan officer before you open the line. Do not draw first and ask later.
The safer sequencing for a combined plan is to qualify the mortgage first. Keep the accounts that support qualification unpledged. Use a PAL only against a separate taxable account if your lender confirms it.
What Happens If the Market Drops?
Picture a sharp drop in the middle of your plan. The two products behave very differently.
With a PAL, falling collateral value can trigger a call. You post more assets, repay part of the line, or the lender sells holdings. That forced sale can hurt long-term goals, as the alert warns. The cure window is set by the lender, so read the agreement.
With an asset qualifier mortgage, nothing is pledged. A drop does not trigger a call. It can, however, matter before closing. If balances fall below what the loan needs, the file can lose coverage, and the lender reviews the statements it relied on.
After closing, the mortgage payment is the same regardless of the market. That stability is the quiet advantage.
Ohio Purchase Notes
Ohio is one of the 16 states where Lendmire’s consumer mortgage lending is licensed. The program figures above do not change by state. What changes by state are the local items, like taxes, insurance and prices, which are context rather than program terms.
Buyers who ask about these products in Ohio tend to fall into familiar groups: retirees relocating, business owners who sold, and holders of concentrated stock. The same mechanics apply to each.
On rentals. If the Ohio property is a pure rental, a separate path exists. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The complete DSCR loans guide covers that route.
One more point. Both products sit under a lender’s duty to confirm you can repay. The lender verifies the assets it relies on using third-party records, which is why statements are the evidence.
Key Terms Defined
Pledged asset line (PAL): A revolving credit line secured by a brokerage portfolio, also called a securities-backed line of credit.
Asset qualifier path: An underwriting route where eligible assets must equal or exceed the whole loan, with no income documented.
Asset depletion path: An underwriting route that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The percentage of an asset’s balance that a lender will not count.
Seasoning: The time assets must sit in your accounts before the lender counts them.
Margin call: A demand to add collateral or repay when pledged value falls.
Verdict
Neither option is better in the abstract. They answer different questions.
If you lack cash and have solid documented income, a PAL may bridge the gap, with the understanding that you take on callable, market-linked debt. If you lack documented income but hold balances large enough to cover the loan, the asset qualifier mortgage is usually the simpler structure, since nothing is pledged. If your assets are large but fall short of the whole loan, the depletion path may fit better.
The mixed case is the one to plan carefully. Ask what each lender accepts before you move any money.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker, and every file is underwritten individually, not a commitment to lend.
Frequently Asked Questions
Is a pledged asset line the same as a mortgage?
No. A PAL is a revolving credit line secured by securities. A mortgage is secured by the home. You can use PAL proceeds toward a purchase, but you still need mortgage financing unless you are paying in full.
Is “asset qualifier” the same as “asset depletion”?
Not in Lendmire’s network. The qualifier path needs eligible assets to cover the entire loan. The depletion path turns assets into monthly income and runs a debt-to-income test. Lenders sometimes use the terms interchangeably.
Do I have to sell stock under either option?
Not to qualify. A PAL borrows against holdings without a sale, though the alert warns you may have to sell if the lender calls. An asset qualifier leaves your accounts in place.
Can retirement accounts count?
Yes, through asset-based programs. On the qualifier path, a 401(k) or IRA counts at 90% under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. A PAL generally uses taxable securities as collateral.
What about cryptocurrency or business accounts?
Neither path publishes them as eligible. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Lendmire’s asset-based mortgage in Ohio page presents the program for Ohio borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. FINRA
2. SEC/FINRA Investor Alert (investor.gov)
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is an Asset Qualifier Mortgage Harder to Get Than an Asset Depletion Loan? · Does a Securities-Backed Line of Credit Hurt Your Asset-Based Mortgage Application? · Asset Qualifier vs Asset Depletion for a Tech Employee
Guides: Asset-Based Mortgage in Ohio
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.