The Quick Read: An asset qualifier mortgage lets an Indiana homeowner buy the next home before the current one sells, because the loan is qualified on seasoned liquid assets that cover the whole loan rather than on income, so a sale that has not closed yet is not what qualifies you, subject to underwriting through select programs. A second path, asset depletion, turns assets into monthly income instead. Which path fits depends on how large your balances are compared with the loan.
- Qualifier path: eligible assets, after the credit percentages, must equal or exceed the entire loan. No employment or income is documented.
- Depletion path: usable assets divided by 60 months become qualifying income, which then runs through a debt-to-income test.
- Leverage: on the qualifier path, up to 80% on a purchase of a primary residence or second home. The depletion path allows 80% on a purchase of those homes and 65% on an investment property.
- You are on one path at a time. The two sets of rules are never blended.
Why Buying First Is Hard on Normal Underwriting
Most mortgage files assume a paycheck. If you keep the old home while buying the new one, both payments count against your income. For a retiree, a business seller or an early-retired professional living off a portfolio, that math usually fails on paper. The reason is documented income, not net worth.
The usual workarounds each solve a different problem. A bridge loan, a home equity line or a contingent offer all address cash flow or offer strength. None of them changes how you qualify. An asset-based file does.
Key Terms Defined
- Asset qualifier path: a program where eligible assets alone must cover the whole loan amount, with no employment or income documented.
- Asset depletion path: a program that converts usable assets into a monthly qualifying income by dividing them by 60 months.
- Haircut: the share of an account’s balance a lender refuses to count, usually because the asset can lose value or carries withdrawal costs.
- Seasoning: how long funds must have sat in your account before the lender will count them.
- Debt-to-income (DTI): your monthly debts as a share of your monthly qualifying income.
- Departing residence: the home you own now and plan to sell after buying the next one.
- Bridge loan: short-term financing, secured by the old home, that supplies cash until it sells.
How Underwriting Treats an Asset Qualifier, Step by Step
The idea is not new. The federal bank regulator describes asset depletion underwriting as using a borrower’s assets to calculate a hypothetical cash annuity stream. That stream is added to other income when judging ability to repay. The regulator notes the approach often fits wealthy applicants who hold large liquid assets but lack cash flow. The word hypothetical matters. Nobody makes you spend the money.
A law-firm analysis of that guidance points out that it sets no formula and no safe harbor. So each program sets its own percentages and divisor. That is why programs differ, and why the figures below belong to the programs Lendmire places files with, not to every lender.
The qualifier path
Here the assets cover the loan outright. Across the wholesale network, the credit given to each balance on this path works like this, subject to underwriting:
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% if you are under 59½. They count at 100% at 59½ or older.
- Accounts combine, so several balances can add up to the loan amount.
Funds need 60 days of seasoning, with two months of statements for each qualifying account. Credit is reviewed with a 600 minimum score on this path. Housing history is expected to run 0x30x12, and one 30-day late in the last twelve months is considered case by case. Loans run up to $4,000,000. Leverage tops out at 80% on a purchase and 75% on a refinance, for a principal residence or second home. At or below 75% loan-to-value, no reserves are required. Above that, the lender sets them.
The depletion path
Here the assets become income. Haircuts are steeper:
- Cash accounts and CDs count at 100%.
- Securities count at 80%, and private stock at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Statements must be at least 120 days old at application, plus a recent statement within 45 days. Usable assets divided by 60 months produce the monthly qualifying income. That income must carry the new housing payment and your other debts through the program’s debt-to-income test. Loans run from $125,000 to $3,500,000. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when assets are your only income source. Leverage is up to 80% on a purchase or rate-and-term refinance of a primary residence or second home, and 65% on an investment property. Credit follows the lender’s matrix.
Both paths document the assets. “No income documentation” never means “no documentation.” Lenders verify ownership, balances and history through third-party records. A consumer-purpose federal rule on ability to repay lets a lender rely on income, assets or both. It also lets a lender skip employment verification when it relies on investment income. Whether and how that rule reaches a particular loan is for the lender and counsel to settle.
What Happens to the Old Home’s Payment?
This is the question most buy-first articles skip. The answer depends on the path.
On the qualifier path, no income is documented, so no DTI test compares your payments with your earnings. Your assets must cover the entire new loan. The lender still reviews your credit and housing history, and that includes the mortgage on the home you are leaving. The old payment is not tested against income. It is simply part of the picture the lender reviews, and lender guidelines govern the details.
On the depletion path, the old mortgage payment normally stays in your debts. The new payment and the old one both run through DTI. Some programs let documented rent from the old home offset its payment if you keep it as a rental. That depends on the lease or an appraiser’s rent schedule, such as Form 1007 for a single-family home or Form 1025 for a small income property. Treat that offset as something to confirm with the lender, not as a given.
Does your old home’s equity count? Not on the qualifier path, which credits only the account types listed above. On the depletion path, real-estate equity is one eligible class at 60%. Cash-out proceeds never count as qualifying assets on that path. Expected sale proceeds are a different matter. Money from a sale that has not closed is not an account balance. It starts counting only after it lands in an eligible account and meets seasoning.
A Worked Example
The figures below are illustrative. The lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings. You are under 59½.
- Brokerage at 100% counts $330,000.
- The 401(k) at 90% counts $270,000.
- Savings at 100% counts $200,000.
That totals $800,000 of usable assets, which equals the loan. The file can qualify on assets alone, subject to underwriting. Nothing about the old home’s sale is needed. The point is that the same dollars cannot do several jobs. Money earmarked for the down payment, closing costs and any lender-required reserves should not also be counted as qualifying assets. Confirm with the lender how it treats those funds before you commit.
Depletion path. Suppose you hold $1,500,000 in securities and $300,000 in cash.
- Securities at 80% count $1,200,000.
- Cash at 100% counts $300,000.
That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts, including the old home’s payment if you still owe on it.
Your Options Side by Side
The asset qualifier solves a qualifying problem. The others solve a cash problem. Practitioner explainers describe contingent offers as weaker in sellers’ eyes, and note that bridge loans run costlier than conventional financing. A home equity line usually must be opened before you list.
| Option | What it solves | Main risk |
|---|---|---|
| Asset qualifier | Qualifying without income | Assets tied up in the file |
| Two payments on income | Nothing extra needed | Both payments count against income |
| Bridge loan | Cash for the down payment | Short term; a delayed sale hurts |
| Home equity line | Cash from existing equity | Often must be opened before listing |
| Contingent offer | Avoids double carry | Weaker offer in the seller’s eyes |
| Sell first, then rent back | No overlap | Temporary housing and moving twice |
These can be combined. An asset qualifier file with a bridge loan as a backstop is a reasonable pairing if you want a cushion. The bridge adds its own costs and short term, so weigh it separately.
How to Buy Before You Sell in Indiana: The Timeline
The program figures do not change by state. The sequence below is the practical order of events.
1. Inventory your accounts. List every balance, who owns it and what type it is.
2. Pick the path. Do your eligible assets, after the credit percentages, cover the full loan? That points to the qualifier path. If not, the depletion path may fit better.
3. Season the funds. Qualifier-path funds need 60 days in place. Depletion-path statements must be 120 days old, plus a recent statement. Do not shuffle money in the meantime.
4. Get the file reviewed before you shop. A lender looks at statements, credit and the property, then confirms what it will count.
5. Make the offer without a sale contingency. That is the main edge of this approach.
6. Close on the new home. You now own both properties.
7. List the old home. Price it to sell, not to wish.
8. Pay off the old mortgage at sale. Proceeds go to your accounts, where they rebuild your balance.
What the Indiana Part Looks Like
Lendmire does not treat Indiana as a legal variable on its asset-based mortgages program. State items such as title work, closing practice and property taxes apply to any purchase, and they vary by county. Ask your title company and agent how local closings and a rent-back after sale usually work. Lendmire’s consumer mortgage brokerage is licensed in 16 states, Indiana among them, so an Indiana borrower can use these programs, subject to underwriting.
Where the Rule Breaks: Edge Cases
- Crypto, precious metals, collectibles and pledged funds. These are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
- Funds not eligible 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.
- Retirement accounts. The two paths treat them differently: 90% or 100% by age on the qualifier path, a flat 70% on the depletion path.
- Special funds. Sale-of-business, inheritance and legal-settlement funds are excused from the depletion path’s 120-day seasoning.
- Supplementing income. On the depletion path, asset-derived income can supplement documented income up to a 45% DTI, and then the minimum-assets rule is waived.
- Investment property. An asset qualifier is a consumer product. Only the depletion path takes investment property, at 65% on a purchase. Pure rental buyers usually belong on a business-purpose DSCR loan. Rent covering the payment, not your balance sheet, drives that file. The complete DSCR loans guide explains how that works.
What If the Old Home Doesn’t Sell?
You carry both homes until it does. That is the real cost of this strategy. A bridge loan explainer names a delayed sale as its main risk, and the same logic applies to double carry. Stress-test before you buy:
- Could you carry both properties for a long stretch from savings without touching the assets that qualify you?
- What happens to your post-closing balances if you spend liquid funds on carry?
- Could you rent the old home if it will not sell? Check whether the program credits that rent.
- Do you have a price at which you would cut and sell?
Lighter income documentation is not lighter review. Lenders still look at credit, assets and the property.
Who It Fits, and Who Should Look Elsewhere
It fits retirees, people who sold a business, recipients of an inheritance or settlement, and households living on a portfolio. These borrowers have large balances and little documented income. It also fits an owner whose traditional personal-income documentation shows little income after depreciation and write-offs. Borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
It is a poor fit if your wealth sits mostly in home equity and you have few liquid assets. Neither path counts equity the way a cash balance counts. In that case look at the alternatives in the table. Our companion explainer Do You Have to Liquidate Assets to Reserve an Asset Qualifier Mortgage? covers a related question.
Pre-Application Checklist
- Statements for every account you plan to use, with your name on each.
- A clear picture of which funds are earmarked for the down payment and closing costs.
- Access to each account. Do not move money between accounts without asking first.
- Your current mortgage statement on the old home.
- Any lease on the old home, if you plan to rent it.
- A list of any assets that are not cash or securities, so they can be reviewed.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The assets stay in your accounts. The calculation is a qualifying convention, not a withdrawal plan. Lenders do verify the balances, so you still provide statements.
Can I use the expected sale price of my current home?
Not directly. On the depletion path, real-estate equity counts at 60%, subject to underwriting. Once sale proceeds land in an eligible account, they count after seasoning.
Does this work for a rental property purchase?
Only on the depletion path, with leverage up to 65% on a purchase. A purchase held purely as a rental usually fits a DSCR loan better, since it is reviewed on the property’s rent.
Is this the same as a bank statement loan?
No. A bank statement program is for borrowers who document income with deposits. An asset qualifier looks at balances, not deposits.
Is it just for people with no income?
No. On the depletion path, asset-derived income can supplement documented income, up to a 45% DTI. The qualifier path is aimed at borrowers with large balances and little documented income.
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. Programs are placed through select lenders in its wholesale network, and every file is underwritten individually. Indiana owners with the right balance sheet may find the sequence more flexible than they expected.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Mondaq: OCC Bulletin on Asset Dissipation
3. CFPB Regulation Z, 12 CFR 1026.43
4. SmartAsset: Bridge Loan vs. HELOC
5. HomeLight: Buyer Bridge Loan vs. HELOC
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Qualifier vs Asset Depletion for an Heir · Asset Qualifier vs Asset Depletion for a FIRE Household · Asset Qualifier Mortgage vs Bank Statement Mortgage
Guides: Asset-Based Mortgage in Indiana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.