The Quick Read: No. An asset-based mortgage is reviewed around what you own, not on what your tax return says you earned, so neither of its two paths asks for returns, W-2s or pay stubs, subject to underwriting. Your assets are documented in detail instead, and the program figures are the same in Alabama as anywhere else.
- Asset qualifier path: your eligible assets must cover the entire loan, and no employment or income is documented.
- Asset depletion path: your assets are divided by 60 months into a qualifying income, which then runs through a debt-to-income test.
- What replaces returns: account statements, a credit review and seasoning of your funds.
- Who it fits: retirees, business sellers, inheritance recipients and portfolio-funded households with large balances and light documented income.
- One catch: if you supplement assets with documented income, expect that income to be documented.
What Is an Asset-Based Mortgage?
An asset-based mortgage is a home loan where your savings and investments, not your paycheck, carry the approval. Lenders and borrowers also call it asset depletion, asset utilization or an asset qualifier loan. The names overlap, but the mechanics split into two distinct paths.
Across the wholesale network Lendmire works with, these programs serve a specific borrower. Think of a retiree with a seven-figure portfolio and a small pension, or someone who just sold a business and has cash but no salary. Their balances are large. Their documented income is not.
Lendmire is a mortgage broker. It arranges these loans through select lenders in its network, and the lender underwrites and approves. Its consumer mortgage lending is licensed in 16 states, Alabama among them, so an Alabama borrower can be served directly. Every figure here is a ceiling or floor from select programs, subject to underwriting, never an offer.
One clarification up front. “Asset-based” here means your personal assets qualify you. It does not mean an asset-based business loan secured by inventory or receivables, and it is not a hard-money loan.
Do You Need Tax Returns, W-2s or Pay Stubs?
You do not need any of the three on either path. The program was built for people whose returns understate their wealth, so the file leans on balance statements instead.
| Document | Asset qualifier path | Asset depletion path |
|---|---|---|
| Traditional personal-income documentation | Not requested | Not requested for asset income |
| W-2s and pay stubs | Not requested | Not requested for asset income |
| Employment verification | None documented | None for asset income |
| Asset statements | Required | Required |
| Credit review | Required | Required |
The depletion path has one wrinkle. Asset income can supplement income you do document, up to a 45% debt-to-income ratio. If you go that route, the documented income is reviewed the way it would be anywhere. That part of the file may well involve returns or pay records. Whether you pay for that complexity depends on whether you need it, because a borrower with enough assets often does not.
Notice what this table does not say. The assets are verified on both paths, and the lender runs your credit.
Which Path Fits You?
Pick the path first. A borrower is qualified on one path at a time, and mixing the two tables is the fastest way to misjudge a file.
Choose the asset qualifier path when your assets can cover the whole loan. The lender adds up your eligible balances after the credit percentages below. If that total equals or exceeds the entire loan amount, you qualify on assets alone. Loans run up to $4,000,000 on this path, with leverage up to 80% on a purchase and 75% on a refinance for a principal residence or second home. Whether cash-out is available on this path is set by the lender, so ask before planning around it. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Choose the asset depletion path when your assets are big but not loan-sized. The lender converts usable assets into monthly income by dividing them by 60 months. That income must carry the housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000. On a principal residence or second home, leverage reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. On an investment property, the depletion path caps at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
The investment-property option exists only on the depletion path. If you are buying a rental, read the section on rentals further down before you commit to either.
What Do You Submit Instead of Tax Returns?
You submit statements. Think of the file as an asset binder rather than an income binder.
- Account statements. On the qualifier path, expect two months of statements for each qualifying account, plus 60 days of seasoning. Seasoning means your funds have sat in the account for a set period.
- Older statements on the depletion path. Statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
- Credit review. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount. A first-time investor on the depletion path needs 700.
- Housing history. Programs look for 0x30x12, meaning no 30-day late payments in the last twelve months. One late is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
- Source of any large deposit. Lenders review where recent money came from.
Credit is still pulled and scored. Never read asset-based as no credit check. It also does not mean no documentation, because the assets are the documentation.
Which Assets Count, and How Much of Each?
Lenders do not count every dollar at face value. The percentage depends on the account type and the path.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Savings, money market | 100% | Cash accounts at 100% |
| Certificates of deposit | 100% | 100% |
| 401(k) and IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
On the qualifier path, accounts combine. On the depletion path, 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 are not eligible.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share 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 lender reviewing the source.
How Do Assets Become Qualifying Income?
On the qualifier path, there is no conversion. You add up usable assets and compare them to the loan.
Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%. You hold $300,000 in a 401(k) and are under 59½, so it counts at 90%, or $270,000. You hold $200,000 in savings at 100%. Together that counts as $800,000 of usable assets, which is reviewed on assets alone.
On the depletion path, the conversion is a division. Take $1,500,000 in securities, which count at 80%, or $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 usable, divided by 60 months, which produces $25,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
These examples are illustrative, and the lender’s own calculation governs.
Depletion has minimums. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 liquid. If assets supplement documented income instead, the minimum-assets rule is waived.
Edge Cases: When Your Tax Returns Still Matter
Returns stay out of the way most of the time. A few situations bring income back into the conversation.
You file low returns on purpose. Heavy write-offs and depreciation shrink taxable income. On either path, that does not matter, because the lender is not reading the return.
You are partly self-employed. If you want to blend asset income with business income, that business income is documented under the applicable program, subject to lender guidelines. Those files look different from a pure asset file. If self-employment is your main income, Lendmire’s piece How Many Years of Tax Returns Does a Self-Employed Mortgage Need? covers that route.
Your balances move. The file rests on documented balances. A large withdrawal or a market drop before approval can change the usable total, so keep accounts steady while the file is open.
You are a first-time investor on depletion. The 700 score requirement applies, so check your credit before you plan.
What About Rentals? Where DSCR Fits
If you are buying a property to rent out, a different loan usually fits 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 federal Truth in Lending summary from the CFPB treats credit to buy or improve non-owner-occupied rental property as business-purpose credit.
Business purpose is a fact test, not a label. Compliance Alliance notes that not every property called an investment property is exempt, because the loan’s purpose and occupancy decide it. Plan to live in even one unit and the deal may fall into a different category, one that is not treated as a business-purpose loan.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Our complete DSCR loans guide walks through that math. The asset-based mortgage still earns its place when you want to buy a home you will live in, or a second home, and your income does not show it.
One disclosure difference follows. An asset-based mortgage is a consumer loan, so standard consumer mortgage disclosures apply. DSCR loans are business-purpose and exempt from those disclosures.
Is There an Alabama Twist?
Not on the program. What Alabama changes is the property: local prices, taxes and insurance shape what you borrow and how much cash stays in the accounts.
That matters more than it sounds. Your usable assets must cover the loan or carry the debt-to-income test, so a smaller loan means a gentler ask.
Tax treatment varies; consult a qualified professional.
Pros, Cons and Who Should Skip It
Pros. You qualify without a paycheck. Large balances do the work. Write-offs do not hurt you. Retirement money counts, at a haircut.
Cons. You need real wealth in eligible, seasoned accounts. Haircuts shrink your usable total, so a $1,000,000 retirement balance counts as $700,000 on the depletion path. Leverage is lower on the depletion path than many borrowers expect, especially on cash-out. And leaving the wealth in accounts means you stay invested, with market risk.
Skip it if you earn steady traditional employment income and qualify the usual way. Big banks and large retail lenders may offer simpler terms to borrowers with strong documented income. Skip it too if your wealth sits mostly in crypto, collectibles or foreign accounts that the program does not list as eligible, unless you can convert it to seasoned cash first.
Key Terms Defined
Asset qualifier path: the route where eligible assets, after credit percentages, equal or exceed the whole loan amount.
Asset depletion path: the route where usable assets are divided by 60 months into monthly qualifying income.
Seasoning: the length of time funds have sat in your account before they count.
Debt-to-income (DTI): your monthly debts divided by your monthly income, which the depletion path uses to test affordability.
Haircut: the share of an asset’s balance a lender will not count.
DSCR loan: an investor loan that qualifies primarily on rent covering the property’s payment.
Frequently Asked Questions
Do I need a job to get an asset-based mortgage?
No job is required on the qualifier path, where no employment or income is documented. On the depletion path, assets alone can serve as your income when you meet the minimums, subject to underwriting. If you hold a job, its income can supplement your assets up to a 45% debt-to-income ratio.
Do retirement accounts count?
Yes, with a haircut. On the qualifier path, a 401(k) or IRA counts at 90% if you are under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. You do not need to withdraw anything to use them.
Can I buy a rental property with this loan?
Only on the depletion path, with leverage up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. For a pure rental, many investors compare it against a DSCR loan, which looks at the property’s rent instead of your assets. Which fits depends on your balances, the property and the lender. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Is credit still checked?
Yes. The depletion path follows the lender’s matrix, with 700 for a first-time investor. Housing history also matters.
What if my assets are in cryptocurrency?
Cryptocurrency is not published as an eligible asset on either path. The documented route is converting it to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
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’s asset-based mortgage in Alabama page presents the program for Alabama 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. CFPB Truth in Lending summary
2. Compliance Alliance, Reg Z and Investment Properties
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 Long Should Money Sit in an Account Before an Asset-Based Mortgage Application? · How an Asset Depletion Mortgage Works · Can You Get an Asset Depletion Mortgage After a Foreclosure or Short Sale?
Guides: Asset-Based Mortgage in Alabama
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.