The Quick Read: Usually only when your documented income is small next to your wealth, you want to keep your portfolio invested instead of selling it, and you plan to hold the loan long enough that its extra cost makes sense. If a pension, Social Security, and required distributions already carry the payment, a conventional mortgage normally wins. Lendmire is a broker, so these figures are ranges from select programs in its network, subject to underwriting.
- Asset depletion turns your usable assets into monthly qualifying income by dividing them by 60 months.
- A separate asset qualifier path skips income entirely if your eligible assets cover the whole loan.
- Retirement accounts count at 70% on the depletion path and up to 100% on the qualifier path after age 59½.
- Nothing is sold or withdrawn. The math is on paper, and your statements are still documented.
- Conventional wins when your real, continuing income already qualifies you.
Why Does a Wealthy Retiree Get Declined in the First Place?
A conventional mortgage asks one question first: how much income can you document that will keep coming in? A retiree with a seven-figure portfolio often has a modest answer, because most of the money sits untouched in accounts.
That is the whole problem. Underwriters measure your debt-to-income ratio, which is your monthly debts divided by your monthly income. If your income line is small, the ratio looks bad even when your net worth is large. The portfolio does not show up as income unless you are already drawing from it on a schedule.
Picture a retiree in Charlotte who sold a business and now lives off a brokerage account. Her statements show a healthy balance and almost no deposits. On paper, she looks like she earns very little. Asset-based programs exist for exactly this borrower.
The same pattern fits an early-retired professional in the Triangle, a widow who received an inheritance, or a couple relocating to the mountains with proceeds from a house sale. Large balances, light documented income. That is the profile.
How Do the Two Asset Paths Work?
Across the wholesale network Lendmire works with, asset-based consumer mortgages come in two flavors. You qualify on one path at a time, never a blend of both. These are the asset-based mortgage programs the brokerage places through select lenders.
The asset qualifier path covers the entire loan with eligible assets. After the credit percentages below, your assets must equal or exceed the whole loan amount. No employment or income is documented. The assets themselves are fully documented.
The asset depletion path converts your usable assets into monthly income. The lender divides usable assets by 60 months. That number then runs through the debt-to-income test, alongside your housing payment and other debts.
Here is the shape of each, using illustrative numbers. The lender’s own calculation governs, and every figure is subject to underwriting.
- Qualifier example: An $800,000 loan, with $330,000 in brokerage accounts (counted at 100%), $300,000 in a 401(k) while under age 59½ (counted at 90%, or $270,000), and $200,000 in savings (100%). That counts $800,000 of usable assets, so the file is reviewed on assets alone.
- Depletion example: $1,500,000 in securities (counted at 80%, or $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 then has to carry the housing payment and other debts through the debt-to-income test.
Notice what differs. The qualifier path asks whether your assets can pay off the loan outright. The depletion path asks whether your assets, spread over 60 months, can behave like a paycheck.
What Counts, and at What Percentage?
Different assets count at different percentages, which the table below shows for each asset type. Each percentage is the share of a balance that the lender will credit. The two paths use different tables, so never mix them.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage / securities | 100% | 80% |
| Certificates of deposit | 100% | 100% |
| Savings / money market / cash | 100% | 100% |
| 401(k) and IRA, under 59½ | 90% | 70% |
| 401(k) and IRA, 59½ or older | 100% | 70% |
| Real-estate equity | Not listed | 60% |
| Privately held stock | Not eligible | Not eligible |
Two takeaways matter for a retiree. First, if you are 59½ or older and most of your money is in retirement accounts, the qualifier path credits those balances at full value. The depletion path haircuts them to 70% at any age.
Second, the depletion path excludes several things. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and non-vested restricted stock units do not count. Privately held stock is not eligible on either path. Cryptocurrency, precious metals, collectibles, and borrowed or pledged funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account, and the lender reviews the source.
When Does Conventional Win?
Conventional wins whenever your documented, continuing income already qualifies you. That is the honest answer, and it is the section most asset-based sales pages leave out.
Run through these situations before you chase an asset-based loan:
- Pension, Social Security, and required distributions cover the payment. If your income-based debt-to-income ratio already passes, you do not need a workaround.
- You plan to hold the loan briefly. Asset-based programs are generally priced differently from conventional loans, and often higher. A short holding period leaves little time to recoup the difference.
- You are comfortable selling some assets. If a modest sale funds a larger down payment and you have already weighed the tax cost, a smaller conventional loan may be simpler. Tax treatment varies; consult a qualified professional.
- Your wealth is mostly illiquid. Business equity, private holdings, and borrowed or margin funds do not carry an asset file. Converting them first may be the only route.
One more point about conventional underwriting: agency-style asset rules generally require the assets to be fully accessible, free of withdrawal penalty, and not already used as income. Retirement balances must also be fully vested. That is a narrower door than most retirees assume.
When Does Asset Depletion Win?
It wins when income is the only thing standing between you and approval. The table below turns that into situations you can check against your own file.
| Your situation | Likely better fit |
|---|---|
| Pension and Social Security pass the income test | Conventional |
| Near miss on debt-to-income | Hybrid (supplement income) |
| Large taxable portfolio, little income | Asset depletion |
| Eligible assets cover the whole loan, age 59½+ | Asset qualifier |
| Mostly retirement money, under 59½ | Qualifier (90%) or depletion (70%) |
| Short holding period | Conventional |
| Rental purchase, rent covers the payment | DSCR loan |
The pattern is simple. The more of your wealth that sits in cash, CDs, and brokerage accounts, the better asset-based underwriting treats you. The more your income already looks like income, the less reason you have to leave conventional.
Can You Combine Real Income With Assets?
Yes, on the depletion path. Asset-derived income can supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
That matters for the near-miss borrower. Say a retiree has a pension and Social Security that get her to the edge of qualifying. Those two sources alone push the debt-to-income ratio slightly too high. Adding income derived from a taxable portfolio can pull the ratio back into range without a full conversion to an assets-only file.
This hybrid is easy to overlook. Most people assume it is either all income or all assets. In practice, a mixed file is common for retirees with some steady income and a large portfolio.
Three North Carolina Retiree Scenarios
These are hypothetical profiles, built to show the decision logic. None reflects a real borrower.
Conventional wins. A retired teacher in Raleigh draws a pension and Social Security. Her income-based ratio passes comfortably on a modest primary residence. She gains nothing from an asset-based file. She takes the conventional route and keeps her portfolio untouched.
Asset depletion wins. A retired executive in Asheville holds the securities and cash from the depletion example above. His documented income is close to zero, but $25,000 of monthly qualifying income carries a primary residence through the debt-to-income test. He needs at least the lesser of $1,000,000 or 1.25 times the loan balance in qualified assets, and never less than $250,000 liquid. He clears that. On a purchase of a primary residence, the depletion path allows up to 80% leverage, subject to underwriting. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Hybrid. A couple relocating to the coast has a small pension and a mid-size brokerage account. The pension alone leaves them just over the debt-to-income limit. Adding derived income supplements the file up to 45%, and the minimum-assets rule is waived because it supplements documented income.
What Does It Cost Compared With Selling Assets?
Compare two costs, not one. The asset-based loan generally costs more than a conventional loan. Selling assets to avoid it carries its own costs: a possible tax bill, lost market exposure, and the loss of income from what you sold.
Here is a simple break-even way to think about it:
1. Ask for side-by-side pricing on the conventional option and the asset-based option.
2. Estimate what you would lose by selling, including any tax from your advisor.
3. Decide how long you will hold the loan or refinance it.
4. If the extra financing cost over that holding period is smaller than the cost of selling, the asset-based loan can come out ahead.
Borrowing keeps your portfolio invested. A cash purchase does not. A home equity line or a bridge loan can also fill a gap, but each follows its own program rules, not this one.
What About a Rental Purchase?
A rental is a different decision, and for most retirees buying one, the DSCR loan is the cleaner tool. 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.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income is not the test. If the rent covers the payment, you may not need an asset-based file at all.
Asset depletion makes sense for a rental only when the rent will not carry the payment, such as a low-rent property or a vacant one. On the depletion path, an investment property is limited to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. A first-time investor needs a 700 credit score on that path. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Select lenders in the network also review DSCR files below 1.00 coverage, though leverage and terms adjust. That can be another option if the rent falls short.
How Does the Regulatory Frame Fit In?
Asset-based lending is not a loophole. Federal ability-to-repay rules apply to these loans too. Regulation Z § 1026.43 says a lender may base its repayment decision on income, on assets other than the home securing the loan, or on both. It also lists the kinds of assets a lender may consider, including savings, retirement balances, stocks, bonds, and CDs.
CFS Review’s discussion of non-QM loans under the ability-to-repay rule makes the takeaway plain. Non-QM does not skip the repayment check. It satisfies it through a different documentation path.
What Does North Carolina Change?
For program figures, nothing. The leverage, haircuts, and seasoning rules above are the same in North Carolina as anywhere else the program is offered. Lendmire arranges consumer mortgages in 16 states, North Carolina among them.
State-level facts act as context for the file, not as program terms. Property taxes and homeowners insurance vary by county and flow into the housing payment that the depletion path tests. Coastal homes can carry heavier insurance costs than inland ones, which matters when your income is derived rather than earned.
North Carolina draws retirees from higher-cost states, and many arrive with large home-sale proceeds and little documented income. Those proceeds are often the funds this program is built for. The financial picture, not the zip code, decides the path.
What Risks Should You Weigh?
An asset-based loan is still a mortgage. Four risks deserve attention: market drops, seasoning, moving money, and credit.
Market drops. Your qualifying assets are valued when you apply. If markets fall afterward, the loan does not change, but your cushion shrinks. Keep your own reserves beyond what the lender requires.
Seasoning. Seasoning is how long funds must sit in an account before the lender counts them. On the qualifier path it is 60 days, with two months of statements per account. 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.
Moving money. Large transfers between accounts can complicate a file. Avoid shuffling balances once you start. Document the source of any deposit.
Credit. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. A housing history of 0x30x12 is the target, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. All of this is subject to underwriting.
Key Terms Defined
Asset qualifier path: Eligible assets, after credit percentages, must equal or exceed the entire loan, and no income is documented.
Asset depletion path: Usable assets divided by 60 months become monthly qualifying income that runs through the debt-to-income test.
Haircut: The share of a balance the lender will not count. If a lender credits 70% of a balance, the remaining 30% is the haircut.
Seasoning: The waiting period funds must sit in an account before the lender counts them.
Debt-to-income ratio: Your monthly debts divided by your monthly income.
What Should You Gather Before You Apply?
Collect the following before you start:
- Statements for every account you want counted, with two months of history for the qualifier path
- Older statements at least 120 days old, plus one within 45 days, for the depletion path
- Proof of the source for any recent large deposit
- Details on current debts and your housing history
- A clear read on your age relative to 59½, since it changes how retirement accounts count
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The calculation is on paper only. Nothing is sold or withdrawn. Your assets stay invested, though the lender documents them with statements and, on the depletion path, applies the haircuts described above.
Is asset depletion cheaper than a conventional mortgage?
Usually not. Its value is access, not savings. If you qualify conventionally, compare the two side by side before choosing.
Can I use my IRA or 401(k)?
Yes, at a discount. On the qualifier path, retirement accounts count at 90% under age 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. Terms are subject to underwriting.
What is the minimum I need in assets?
On the depletion path, qualified assets of 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. On the qualifier path, eligible assets must cover the full loan amount. Loan sizes run up to $4,000,000 on the qualifier path and $125,000 to $3,500,000 on the depletion path.
Does it work for a second home?
Yes, on a second home as well as a principal residence, subject to underwriting. The qualifier path offers up to 80% leverage on a purchase and 75% on a refinance. The depletion path allows up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
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 North Carolina page presents the program for North Carolina 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 Regulation Z § 1026.43
2. 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: Can an Alabama Retiree Get a Mortgage on Savings and Investments Alone? · Can a Pennsylvania Early Retiree Get a Mortgage Before Age 59½ on Retirement Accounts? · How Much of a Brokerage Account Counts Toward a North Carolina Asset Qualifier Mortgage?
Guides: Asset-Based Mortgage in North Carolina
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.