The Quick Read: You buy first by qualifying on your assets instead of on the sale of your old home. On one path your eligible balances must cover the whole new loan, and on the other they become monthly qualifying income. Either way the purchase does not have to wait on a home-sale contingency or a new second lien. Your accounts stay invested the whole time, and nothing is sold to run the math. Everything below is subject to underwriting and to the lender’s own calculation.
- The asset qualifier path covers the entire loan with eligible assets and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create qualifying income, then tests it against your debts.
- You are qualified on one path at a time, never a blend of the two.
- The old home’s payment is the pressure point, so ask how the program treats it before you write an offer.
- The qualifier path is for a principal residence or second home. The depletion path also allows investment property, as a business-purpose loan at lower leverage. Many rental purchases fit a DSCR loan better, since it underwrites to the property’s rent.
What Is an Asset Qualifier Mortgage?
An asset qualifier mortgage lets a borrower with large balances and little documented income qualify on what they own. It is built for retirees, people who sold a business, heirs, early-retired professionals, and households that live off a portfolio. Their balances are large and their paychecks are not.
Two paths exist, and they work differently. Here is how each one reads.
The asset qualifier path. Eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000 through select programs.
The asset depletion path. Eligible assets, after haircuts, are divided by 60 months. The result is a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. Loan amounts run from $125,000 to $3,500,000 through select programs.
Assets are documented on both paths. Skipping income documents does not mean skipping documents. The file needs no traditional personal-income documentation, pay stubs or employment verification, but it is fully underwritten and your statements are reviewed. Lendmire is a mortgage broker, so it arranges these loans through select lenders in its network. It does not lend or approve them. Colorado is one of the 16 states where Lendmire does consumer mortgage lending. The program figures here do not change by state.
Key Terms Defined
Asset qualifier: a path where eligible assets alone must cover the whole loan amount.
Asset depletion: a path that divides usable assets by 60 months to produce a monthly qualifying income.
Debt-to-income (DTI): your monthly debts divided by your monthly income. It shows how much of your income the debts consume.
Haircut: the share of an account’s balance that a lender refuses to count, because the asset can lose value or is hard to reach.
Seasoning: how long funds must sit in your account before they count. It proves the money is yours and not a recent loan.
Contingent offer: an offer that depends on the sale of your current home. Sellers often treat it as the weaker offer.
PITIA: principal, interest, taxes, insurance, and association dues. It is the full monthly cost of owning a home.
How Does Underwriting Treat Your Old Home?
Underwriting treats your old home as a liability, and the program decides how much of it the new loan has to absorb. That is the heart of buying before you sell. The two paths handle it differently.
On the qualifier path, no income is documented and no DTI is run. The test is whether eligible assets cover the loan. The old home’s payment does not compete with income, because no income is in the equation. The lender’s ability-to-repay review rests on the assets, though, so how the departing mortgage is treated is a question for the program sheet.
On the depletion path, the old home’s payment is a debt. Your derived income must carry the new housing payment and the old one through the DTI test. Some programs let the departing home’s PITIA drop out of DTI when a sale is pending. Others do not. Evidence that the home is listed or under contract usually matters when it is excluded. Ask this question before you shop, not after.
A borrower with ample assets can still miss the DTI test because two housing payments sit on it at once. The same borrower can pass cleanly on the qualifier path, where assets are tested directly. Choosing the path first, then the property, avoids a lot of rework.
What Counts as an Asset, and at What Percentage?
Each path credits your balances differently, so name the path before you add anything up.
Asset qualifier path, share of the balance that counts:
- Brokerage accounts, certificates of deposit, money market, and savings count at 100%.
- Retirement accounts (employer plans and IRAs) count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Asset depletion path, share of the balance that counts:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Several things do not count on the depletion path. These include custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies. Cash-out proceeds never count as qualifying assets there.
Cryptocurrency, precious metals, collectibles, and borrowed or pledged funds are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account. The lender then reviews the source.
What Do the Numbers Look Like?
Run the qualifier path first. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%, so $330,000. You hold $300,000 in a retirement account and you are under 59½, so 90% gives $270,000. You hold $200,000 in savings, which count at 100%, so $200,000.
- Usable assets: $800,000.
- Loan amount: $800,000.
- Result: assets equal the loan, so the file clears the asset test, subject to underwriting.
That is an illustration. The lender’s own calculation governs.
Now the depletion path. Say you hold $1,500,000 in securities, which count at 80%, so $1,200,000. You also hold $300,000 in cash at 100%.
- Usable assets: $1,500,000.
- Divided by 60 months: $25,000 of monthly qualifying income.
- That income then carries the housing payment and other debts through the DTI test.
Notice what each path asks of you. The qualifier path asks whether your assets equal the loan. The depletion path asks whether the income those assets create can carry your debts, including the old home if it still counts.
Which Path Fits a Buy-First Purchase?
The qualifier path usually fits when your assets are large compared to the loan, because it sidesteps DTI. The depletion path fits when assets are spread across securities, private stock, or retirement accounts and the loan is larger than what the assets alone could cover.
Leverage differs by path. These are ceilings, never offers.
- Qualifier path: up to 80% loan-to-value on a purchase and up to 75% on a refinance, for a principal residence or second home. Reserves are not required at or below 75% loan-to-value. Above that, the lender sets them.
- Depletion path, principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Depletion path, investment property: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
Credit has a floor on the qualifier path. The minimum score is 600, subject to underwriting. The depletion path follows the lender’s matrix of score and loan amount. A first-time investor on the depletion path needs a 700 score. Housing history is expected to be 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
The depletion path also has asset minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 liquid when asset depletion is your only income source. If asset income supplements documented income, it can do so up to a 45% DTI, and the minimum-assets rule is waived.
How Does It Compare With Other Buy-First Tools?
Other tools can also get you into the next home first. They work differently and carry different risks. The descriptions below are those products’ general rules, not this program’s.
| Tool | How it works | Main risk | Effect on your offer |
|---|---|---|---|
| Asset qualifier | Assets alone cover the loan | Old home still carries costs | Not contingent |
| Asset depletion | Assets become monthly income | Old payment may hit DTI | Not contingent |
| Bridge loan | Short-term loan on current home | Balloon payoff, extra lien | Not contingent |
| HELOC | Draw on current home’s equity | Must be set up before listing | Not contingent |
| Home-sale contingency | Offer depends on your sale | Seller may reject it | Weaker |
A bridge loan is typically interest-only with a balloon payoff, and its term generally tops out around a year. A HELOC generally has to be in place before the home is listed. Both add a second lien and a liability. Redfin’s buy-and-sell guide walks through buy-first and sell-first options, including rent-back arrangements. It also shows why a contingent offer can lose to a cleaner one.
An asset-based mortgage adds no second lien and no balloon. You carry the old home’s costs until it sells or turns into a rental. The tradeoff is that your assets stay tied up as qualifying funds through closing.
Where Does the General Rule Break?
The general rule is that assets stay invested and the old home does not block you. These are the places that rule bends.
Borrowed funds. A bridge loan or a HELOC draw is borrowed money. Borrowed and pledged funds are not published as eligible on either path, and a draw also adds a liability. Do not plan to fund your qualifying balances with debt against the home you are leaving.
Retirement accounts. The qualifier path credits employer retirement plans and IRAs at 90% under 59½ and 100% at 59½ or older. The depletion path credits retirement accounts at 70% at any age. The same account can look very different on each path.
Recently moved money. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application plus a recent statement within 45 days. Sale-of-business, inheritance, and legal-settlement funds are excused from that depletion seasoning. If you sold a business last month, say so up front.
Occupancy. On a principal residence or second home, an asset-based mortgage is a consumer loan, and either path can apply. Investment property is available only on the depletion path, as a business-purpose loan at the lower leverage shown above. A purchase you intend to rent often fits a DSCR loan better. 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 old home as a rental. Turning the departing home into a rental is a common plan. Business-purpose rental financing is DSCR, and it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Be careful about pulling cash out of a rental on a business-purpose loan to fund your own home purchase. A lender may treat that use of proceeds as consumer purpose, which can derail the file. Settle the plan with your broker before you move any funds.
Selling investments to hit a number. You do not have to sell anything for the assets to count. If you choose to sell, tax treatment varies, so consult a qualified professional.
Agency programs. Fannie Mae and Freddie Mac have their own asset-based rules for conventional loans, and those rules are generally narrower than the non-agency programs described here. They do not govern this program.
Does Asset Qualifying Mean Lighter Underwriting?
No. The assets are still verified. The federal regulator’s Regulation Z commentary on ability to repay says a lender needs to verify only the income or assets it actually relies on. That language is why asset-based qualifying exists. It also means the lender must document the assets it counts.
A lender can base its ability-to-repay decision on verified assets alone, but a legal trade summary of the rule notes that debt-to-income or residual income still has to be considered. The depletion path’s DTI test reflects that. The qualifier path leans on the assets themselves. Either way, the file is underwritten individually. On a principal residence or second home this is a consumer mortgage, so consumer disclosure rules apply.
What Is the Step-by-Step Sequence?
The order matters. Follow it and the old home rarely becomes the surprise.
1. Inventory your accounts. List cash, brokerage, CDs, money market, savings, and retirement balances by account. Mark anything borrowed, foreign, or recently moved.
2. Pick the path. Compare your usable assets to the loan you want. If assets can equal the loan, the qualifier path may fit. If not, run the depletion math.
3. Ask about the old home’s payment. Find out whether it counts, is excluded with a listing or contract, or does not matter on your path.
4. Season the funds. Park money in one regulated account and leave it. Gather two months of statements for the qualifier path, or the 120-day and 45-day statement set for the depletion path.
5. Get pre-approved on the path you chose. The pre-approval should name the path, the credit percentages applied, and the leverage.
6. Write a clean offer. Without a home-sale contingency, the offer reads like any other financed offer.
7. Keep the accounts intact through closing. Do not move money between accounts without telling your broker.
8. Decide the old home’s future. Sell it, or keep it and place a DSCR loan on it.
What If the Old Home Does Not Sell?
You may carry two homes for a while, and you should plan that cost before you write an offer. The old home’s mortgage, taxes, insurance, utilities, and upkeep continue until it sells or gets a tenant. On the depletion path, its payment may sit inside your DTI. On either path, it also drains the cash you would otherwise keep as a cushion.
A rental exit is the usual backstop. If the old home would rent for enough to cover its own payment, a DSCR refinance can turn the carrying cost into an income-producing asset. Select lenders in the network will look at coverage below 1.00 as well, though leverage and terms adjust when they do. Short-term rental rules vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income.
Keep your qualifying balances separate from your cushion. Dollars used to qualify must stay in the accounts, and what the purchase consumes comes out of the pool. Think of three buckets: qualifying assets, cash for the transaction, and money for carrying two homes.
Does Colorado Change Anything?
It changes the competition, not the program. The leverage, asset credit, and seasoning rules above are the same in Colorado as in the other 15 states where Lendmire does consumer mortgage lending. State factors such as taxes, insurance, and local prices are context for your budget, not program parameters.
What Colorado changes is the offer. Where a seller has other offers, a contingent offer can lose to a clean one, as the Redfin guide above explains. Qualifying on assets lets you make that clean offer, without a bridge loan’s balloon or a HELOC’s second lien. Mountain towns and Front Range suburbs both reward the buyer who does not need to sell first, though the decision still depends on how long you can carry the old home.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The assets stay in your accounts, and the calculation is a qualifying convention. They must remain there, seasoned, through closing. Selling is your choice, and tax effects are a question for a qualified professional.
Does my old home’s mortgage count against me?
It depends on the path and the program. On the qualifier path, the test is whether eligible assets cover the loan, and no income is documented. On the depletion path, the old payment is usually a debt in your DTI unless the program lets it be excluded when a sale is pending. Ask before you make an offer.
Can I use HELOC or bridge-loan money as my qualifying assets?
No. Borrowed and pledged funds are not published as eligible on either path. A HELOC draw also adds a liability. If you use one for another purpose, keep it separate from your qualifying accounts.
Can I use this to buy a rental property?
Only on the asset depletion path. The asset qualifier path is limited to a principal residence or second home. The depletion path also allows investment property, as a business-purpose loan, at up to 65% loan-to-value on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. Many rental purchases fit a DSCR loan better, because it underwrites to the property’s rent rather than your personal assets.
Does this work if I am retired or between jobs?
It is designed for that situation. Retirees, business sellers, and heirs often hold large balances and little documented income. Retirement accounts count at 90% under 59½ and 100% after on the qualifier path. They count at 70% at any age on the depletion path.
Next Step
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. Call 828-256-2183. Lendmire is a broker, programs are placed through select lenders, and nothing here is a commitment to lend.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB: Regulation Z Official Interpretations, §1026.43
3. CFS Review: CFPB Addresses Non-QMs Under Ability-to-Repay Rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Finance a Michigan Vacation Home With an Asset Qualifier Mortgage · How a 401(k) Counts Toward a North Carolina Asset Qualifier Mortgage Under Age 59½ · Can an Indiana Farm Sale Fund a Home Purchase on an Asset Qualifier Mortgage?
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.