The Quick Read: A retiree with large savings and a modest pension can qualify by having the lender treat the assets as the basis for repayment. That happens in one of two ways: the assets cover the whole loan, or the assets are converted into monthly income. Both are subject to underwriting.
- Asset qualifier path: eligible assets must equal or exceed the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Pension and Social Security: these do not help the qualifier path. On the depletion path they can supplement the asset income.
- One path at a time: a borrower is qualified on one path, never a blend of both.
- Documentation: no traditional personal-income documentation, pay stubs or employment verification, but every account is documented with statements.
Why a Retiree Can Qualify Without a Paycheck
A paycheck is one way to show a lender you can repay. Savings are another. Many retirees hold seven figures in brokerage accounts, certificates of deposit and retirement funds while their taxable income is small. A standard income test reads that household as weak. An asset-based test reads it as strong.
Lendmire is a mortgage broker. It places these loans through select lenders in its wholesale network, and the lenders underwrite every file individually. Across that network, asset-based programs share a basic idea. The lender looks at what you own, applies a percentage to each account type, and decides whether that total supports the loan.
This applies to a primary residence or a second home, such as a lake house or a Gulf Coast place near family. Lendmire’s consumer mortgage lending is licensed in 16 states, and Alabama is one of them. The program figures below do not change by state. The full list of options is on Lendmire’s asset-based mortgage programs page, and everything here is subject to underwriting.
The Two Paths, Explained
The asset qualifier path asks one question: do your eligible assets cover the entire loan? If they do, the loan is reviewed on assets alone. The lender does not document your employment or income. It relies on the assets for its repayment review.
The asset depletion path asks a different question. It takes your usable assets and divides them by 60 months. The result is a monthly qualifying income. That income then has to carry the full housing payment and your other debts through the debt-to-income test.
Here is how the two compare:
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Usable assets cover the whole loan | Assets ÷ 60 months = income |
| Income documented | None | Derived from assets (can add pension) |
| Purchase leverage | Up to 80% | Up to 80% (primary or second home) |
| Refinance leverage | Up to 75% | 80% rate-and-term, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
All figures are ceilings and floors through select programs, never offers. Which path suits you depends on how large your balances are relative to the loan. A cash-heavy buyer who wants a modest mortgage often fits the qualifier path. A buyer who wants more leverage or whose assets fall short of the whole loan often fits the depletion path.
Which Accounts Count, and How Much
Not every dollar counts at face value. Each account type is credited at a percentage. The two paths use different percentages, so keep the tables separate.
Asset qualifier path, share of the balance that counts:
| Account type | Credit |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) and IRA, under 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Accounts combine. For most retirees, the age break is already behind them, so retirement balances count in full on this path.
Asset depletion path, share of the balance that counts:
| Account type | Credit |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 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.
Cryptocurrency, precious metals, collectibles and borrowed funds are not published as eligible on either path. The documented route is to convert them into a seasoned cash balance in a regulated account. The lender then reviews the source of the funds.
Worked Example: Savings Only
These numbers are illustrative, and the lender’s own calculation governs. Say a retiree wants an $800,000 loan on the qualifier path. The household holds $330,000 in brokerage accounts, which counts at 100%, or $330,000. It holds $300,000 in a 401(k) while under 59½, which counts at 90%, or $270,000. It also holds $200,000 in savings, which counts at 100%, or $200,000.
The total usable assets are $800,000. That equals the loan, so the file is reviewed on assets alone, subject to underwriting. Leverage still has to fit the program, which is up to 80% on a purchase and 75% on a refinance.
Notice what the example leaves out. The pension never entered the math. On the qualifier path, income of any kind is not the test.
You also cannot count the same dollar twice. Money you spend on the down payment and closing costs leaves the account. On most files that reduces the balance the lender can count, so plan the sequence of funds before you apply.
Worked Example: Pension Plus Savings
Now run the depletion path. Say a retiree holds $1,500,000 in securities, which count at 80%, or $1,200,000. The same retiree also holds $300,000 in cash, which counts at 100%, or $300,000. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income.
That figure then carries the housing payment and other debts through the debt-to-income test. This is where a pension earns its place. The program allows asset-derived income to supplement documented income, up to a 45% debt-to-income ratio. A pension award letter is documented income, so it can sit beside the asset income in the same calculation.
Two things change when assets supplement income. The minimum-assets rule is waived. The pension also lifts the income side of the ratio, which can matter when the loan amount is large relative to the assets.
When assets are the only source of income, the minimums apply. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 in liquid assets.
A retired couple with a modest pension and a seven-figure portfolio often lands in this lane. It is also where a comparison pays off. The same couple might clear the qualifier path on a smaller loan, or need the depletion path on a larger one.
What the Underwriter Checks
The assets are documented on both paths. The loan is reviewed on verified assets rather than income documentation, subject to lender guidelines. That is a big difference from a no-documentation loan, which this program is not. Every file is fully underwritten.
Seasoning and statements. Seasoning means the money has sat in your accounts long enough to prove it is yours.
- Qualifier path: 60 days of seasoning, with two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days.
- Excused funds: on the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
Credit. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount. Housing history is usually reviewed at 0x30x12, meaning no 30-day lates in the last twelve months. One late can be considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event such as a foreclosure needs 4 years of seasoning.
Reserves. The qualifier path requires none at or below 75% loan-to-value, which is the loan amount as a share of the home’s value. Above that, the lender sets them. The depletion path has no published reserve months.
Large unexplained deposits slow files down. A transfer between your own accounts is easy to explain with both statements. A gift or sale of an asset needs a paper trail. Pull your statements early and look for anything you would have to explain.
Sell Investments or Leave Them Invested?
You do not sell anything just to qualify. Depletion is a paper calculation. Your portfolio stays invested and keeps working. Only the money you need for closing leaves the accounts.
That is the practical edge over buying with cash. A retiree who pays cash for a $600,000 home may empty a large share of the portfolio, along with its growth and dividends. Qualifying on assets lets the mortgage carry the purchase while the portfolio stays in place. The trade-off is a monthly payment you must keep making for as long as you hold the loan.
That is a real cost against a retirement budget. Test the payment against your steady income, not against your best-case portfolio year. Markets move. Securities are credited at 80% on the depletion path, and the lender recalculates from the statements in the file. Selling for cash also has tax effects, so tax treatment varies and a qualified professional can advise on yours.
Which Path Fits You
Work through three questions in order.
1. Do your eligible assets cover the whole loan? If yes, the asset qualifier path may fit. It documents no income and runs up to 80% on a purchase.
2. Do assets fall short, but a pension or Social Security fills the gap? The depletion path may fit, with assets supplementing documented income up to a 45% debt-to-income ratio.
3. Do you need more leverage than assets alone can support? The depletion path again, up to 80% on a purchase or rate-and-term refinance of a primary or second home.
A reverse mortgage is a different product. It is built for owners who already have home equity and want to draw on it. It does not help you buy a different home with savings, so it solves a separate problem.
If you still draw a steady paycheck, a standard income-based mortgage or the bank statement program may fit better. Bank statements suit borrowers who document income through deposits. Those are different programs with their own rules.
Buying a Rental Instead
Some retirees want an investment property, not a home to live in. The depletion path covers investment property too, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor on this path needs a 700 score.
Rental financing also runs on its own track. 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. Under the CFPB’s Regulation Z text, credit to acquire or maintain non-owner-occupied rental property is treated as business purpose.
In practice, if rent covers the full monthly obligation, a rental loan is reviewed primarily on property-level rental income, subject to lender guidelines. Your pension is not part of that ratio. Savings still matter as down payment and reserves. Choose asset depletion for a rental only when the property’s rent falls short, since the two methods are separate.
Retirees and the Ability-to-Repay Idea
Federal rules on consumer mortgages do not block retirees. The CFPB’s ability-to-repay guide lists the borrower’s income or assets, other than the home itself, among the factors a lender must consider. It says income need not be salaried, and that retirement benefits, interest and dividends can count. It also says the lender must verify what it relies on using reliable third-party records.
That is why statements matter so much here. The lender is not skipping a step. It swaps the paystub for an account statement.
Alabama Considerations
Alabama is a common landing spot for retirees. Some move from out of state, some downsize near family, and some buy a second home on a lake or the Gulf. The loan figures stay the same everywhere. The costs around the loan are what change.
Homeowners, wind and flood insurance can differ a lot between inland and coastal counties, so get quotes before you commit. Property taxes and any senior exemptions vary by county. These are budget items, not program parameters. Ask a local agent and the county assessor for current numbers.
If you are relocating, expect the lender to review your accounts the same way regardless of where they are held. Funds must sit in regulated domestic accounts. Foreign funds are not eligible on the depletion path.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, equal or exceed the whole loan, and no income is documented.
Asset depletion: a path that divides usable assets by 60 months to create monthly qualifying income.
Seasoning: the period your funds must sit in an account before the lender counts them.
Debt-to-income ratio: your monthly debts, including the new housing payment, as a share of qualifying income.
Loan-to-value (LTV): the loan amount as a percentage of the home’s value or price.
Haircut: the reduction a lender applies to an asset’s balance before counting it.
What Retirees Get Wrong
- Counting a pension on the qualifier path. It does not enter that test. Only assets do.
- Assuming the program is no-doc. The assets are fully documented with statements.
- Mixing the two tables. The percentages for 401(k) and IRA accounts differ by path.
- Moving money late. A transfer inside the seasoning window can force a delay while the lender asks for a paper trail.
- Ignoring the payment. Approval is not affordability. Budget the monthly cost against steady income.
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.
Frequently Asked Questions
Do I have to sell anything to qualify?
No. The depletion calculation is on paper, and your portfolio stays invested. Only the money you spend on the down payment and closing costs leaves your accounts. Expect that spending to reduce the balance the lender can count.
Can I use my pension too?
It depends on the path. On the qualifier path, income is not documented, so a pension plays no part. On the depletion path, a documented pension can sit beside asset-derived income, up to a 45% debt-to-income ratio. Under that structure the minimum-assets rule is waived.
Is this a reverse mortgage?
No. This is a standard purchase or refinance mortgage that you repay monthly. A reverse mortgage lets owners draw on existing home equity and is a separate product. Neither one is a substitute for the other.
Does my age matter?
Age is not a disqualifier. It does change one credit percentage. On the qualifier path, 401(k) and IRA balances count at 90% under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Can I buy a rental this way?
Yes, through the asset depletion path only. Investment property is limited to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The qualifier path is for a principal residence or second home.
Lendmire’s asset-based mortgage in Alabama page presents the program for Alabama borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
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References
1. CFPB Regulation Z, Section 1026.3
2. CFPB Ability-to-Repay and Qualified Mortgage Small Entity Compliance Guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get a Mortgage in Virginia With No Income but a Lot of Savings? · How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage? · How to Buy Before You Sell in Alabama Using an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in Alabama
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.