The Quick Read: You can buy the next home first by qualifying the new mortgage on your liquid assets instead of on proceeds from the old house, which lets you write an offer with no sale contingency and carry both properties while the old one sells. Through select programs, your eligible assets either cover the whole loan outright or convert into monthly qualifying income. Every file is underwritten individually, and nothing here is a commitment to lend.
- Two paths exist, and you use one at a time. The asset qualifier path counts assets against the entire loan. The asset depletion path turns assets into income.
- Your assets stay where they are. Nothing is sold or pledged. The lender counts them and documents them.
- The old house is not the qualifying asset. Its equity either does not count or counts at a reduced share, depending on the path.
- The assets are documented, not waived. No employment or income is documented on the qualifier path. The statements are reviewed in detail.
- Leverage and credit rules differ by path. Both are covered below, with the figures in one place.
Why Is Buying First Hard in Virginia?
Buying first is hard because you must qualify for a second mortgage while the first one still sits on your credit file, and because sellers prefer offers that do not depend on your sale. Both problems have a financing fix, and this article focuses on one of them.
A sale contingency is a clause that makes your purchase depend on selling your current home. Virginia’s standard purchase contract already sets a default here. A copy of the Virginia REALTORS® form says the contract and the financing do not depend on the sale or lease of other real property unless a written contingency says otherwise. Check the current form with your agent, because forms get updated.
If you do add a contingency, the addendum usually carries a kick-out deadline. A brokerage-hosted copy of a Virginia sale-of-buyer’s-property addendum shows the pattern: if you do not satisfy, amend or remove the contingency by the deadline, the contract becomes void. Sellers read that as risk. In many neighborhoods, a clean offer beats a contingent one, and that is the whole reason buyers look for financing that does not wait on a sale.
The second problem is payments. For a retiree, a business seller or an investor whose traditional personal-income documentation shows little income, that math fails even when the balance sheet is strong. An asset-based mortgage changes what the lender measures.
What Is an Asset Qualifier Mortgage?
An asset qualifier mortgage is a loan where your verified liquid assets, not your paycheck, support the borrowing. Practitioners also call this asset depletion, asset utilization or asset-based qualifying. Within the network Lendmire places files with, two distinct paths sit under that umbrella, and they work differently.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. The lender’s review of your ability to repay rests on those assets.
The asset depletion path. Your eligible assets, after haircuts, are added up and 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. Debt-to-income, or DTI, is your monthly debts divided by your monthly income.
Nobody sells anything on either path. The 60-month division is a qualifying convention, not a withdrawal plan. The same explanation appears in a practitioner explainer on asset depletion loans, and it matches how these files work every day.
Lendmire is a broker. It arranges these loans through select lenders in its network, and the lender underwrites and decides. For a Virginia borrower, the program figures below are the same as anywhere else. The loan is a consumer mortgage for a principal residence or second home. The depletion path also allows an investment property, at lower leverage.
How Does Underwriting Actually Treat It, Step by Step?
Underwriting takes inventory of your assets, applies the program’s percentages, then tests the result against the loan. The steps differ slightly by path, so follow the one that fits you.
On the asset qualifier path:
1. The lender lists every account you want to count: brokerage, certificates of deposit, money market, savings and retirement accounts. Accounts combine. 2. Each account gets its credit percentage. The details are in the table in the next section. 3. The lender checks seasoning. That means the money has sat in your accounts for 60 days, shown by two months of statements for each qualifying account. 4. The total of usable assets must equal or exceed the entire loan amount. If it does, you qualify on assets alone, subject to credit and property review. 5. The lender looks at credit. The published floor on this path is a 600 score, with housing history of 0x30x12. One 30-day late in the last twelve months is considered case by case.
On the asset depletion path:
1. The lender lists eligible assets and applies the haircuts. A haircut is the share of a balance the lender will not count. 2. The usable total is divided by 60 months to produce monthly qualifying income. 3. That income, alone or stacked on other documented income, runs through the DTI test with the new payment and your other debts. 4. The lender checks minimum assets: the lesser of $1,000,000 or 1.25 times the loan balance. If asset income is your only income, the minimum is never less than $250,000 in liquid assets. 5. Credit follows the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700 score.
What happens to the old home’s payment? This is the question that matters most for buying first. On the qualifier path, no income is documented, so the payment is not tested against income. The loan stands on the assets and the lender’s review of your ability to repay. On the depletion path, the old mortgage payment counts as a debt in the DTI test unless the loan is paid off or the sale is documented. Treatment of a pending sale varies by program, so confirm it against the guidelines before you write an offer.
A short word on the legal frame. This is a consumer mortgage, so the federal ability-to-repay rule applies. The rule’s text in Regulation Z lets a lender rely on income or assets, not the value of the dwelling securing the loan, and requires third-party records for whatever it relies on. A law-firm analysis of the rule notes that a lender may base its decision on verified assets alone, though it must still consider DTI or residual income in a separate step. In plain terms, the label non-QM does not mean no capacity check. It means the check runs through assets.
Which Assets Count, and How Much?
The two paths count the same account differently, so match each balance to the right column. These are program ceilings and floors through select programs, subject to underwriting.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| CDs | 100% | 100% |
| Money market, savings | 100% | Cash accounts 100% |
| 401(k) or IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
Some assets do not count on the depletion path at all: 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, business accounts beyond your ownership share and borrowed or pledged funds are not published as eligible on either path. The documented route is converting them into a seasoned cash balance in a regulated account, with the lender reviewing the source. Never plan around a percentage for them.
Seasoning differs too. The qualifier path wants 60 days and two months of statements per account. The depletion path wants statements at least 120 days old at application plus the most recent statement within 45 days. Funds from a business sale, an inheritance or a legal settlement are excused from that depletion-path seasoning. For how assets get documented without being sold, see Lendmire’s piece Do You Have to Liquidate Assets to Reserve an Asset Qualifier Mortgage?.
How Much Can You Borrow?
Leverage and loan size are set by path and occupancy. Treat these as ceilings, not offers.
| Path and property | Purchase | Refinance |
|---|---|---|
| Qualifier, principal or second home | Up to 80% | Up to 75% |
| Depletion, principal or second home | Up to 80% | 80% rate-and-term, 60% cash-out |
| Depletion, investment property | Up to 65% | 65% rate-and-term, 60% cash-out |
Loan amounts run up to $4,000,000 on the qualifier path and from $125,000 to $3,500,000 on the depletion path. On the qualifier path, the lender sets reserves above 75% loan-to-value and none are required at or below it. Whether cash-out proceeds are allowed on the qualifier path is the lender’s decision and is not published. On the depletion path, cash-out proceeds never count as qualifying assets.
Run the Numbers: Two Illustrative Files
Here is how both paths look in practice. These are illustrative, and the lender’s own calculation governs.
Qualifier path. Picture a Virginia homeowner who wants an $800,000 loan on the next home. She holds $330,000 in brokerage accounts, which count at 100%, or $330,000. She holds $300,000 in a 401(k) and is under 59½, so it counts at 90%, or $270,000. She holds $200,000 in savings, counted at 100%, or $200,000. That adds up to $800,000 of usable assets, which meets the loan amount. She is reviewed on assets alone, subject to credit and property review. Her old house does not enter the calculation.
Depletion path. Now consider a household with $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the new housing payment and every other debt, including the old mortgage if it is still open. The lender runs that test.
Notice what separates the two. The first household needs enough assets to cover the whole loan. The second needs enough income, and the old payment competes for it. A household with a large portfolio and a small remaining balance on the old home often finds the qualifier path cleaner for a buy-first purchase, though the depletion path suits borrowers whose assets fall short of the loan amount.
How Does It Compare With Other Ways to Buy First?
Each route to buying first trades one risk for another. The table lays them side by side in qualitative terms.
| Route | What it does | Main tradeoff |
|---|---|---|
| Asset qualifier | Assets cover the new loan | Assets tied up in the file |
| Asset depletion | Assets become income | Old payment counts in DTI |
| Bridge loan | Short-term gap financing | Extra loan and cost |
| HELOC on old home | Cash from old home’s equity | Second lien, added payment |
| Sale contingency | Purchase waits on sale | Weaker offer, kick-out risk |
| Sell first | No overlap | Temporary housing, a move twice |
The double-payment risk is real on the bridge and HELOC routes. A buy-before-selling guide walks through the exposure across options, and it is the main reason to size a carrying runway before you commit. An asset-based loan avoids a second lien on the old home. What you give up is flexibility, because the assets counted in the file are the same assets you would otherwise keep as a cushion.
A HELOC also has a timing problem. It generally has to be opened before the old home is listed, which forces a decision earlier than many sellers want to make it.
Where Does the General Rule Break?
The general rule is that assets cover the loan or become income. These edge cases are where files get stuck.
- Moved money. Funds shifted into an account just before application lack seasoning. Move money early or expect extra review of the source.
- Real-estate equity. It counts at 60% on the depletion path and is not listed on the qualifier path. Your old home’s equity is not a shortcut.
- Unlisted asset types. Crypto, metals and collectibles need conversion to a seasoned cash balance first.
- First-time investors. A first-time investor on the depletion path needs a 700 score.
- Housing events. A housing event needs 4 years of seasoning on the depletion path, and multiple bankruptcies are not eligible.
- Assets only just above the loan. Qualifier-path files with thin margins can fail when one account is haircut or excluded.
- Home sells first. If the old home sells before the new loan funds, the picture simplifies, but notify the lender. Proceeds do not count as qualifying assets unless they are seasoned in a regulated account, per lender guidelines.
One point trips up investors in particular. These programs are for consumer purchases of a principal residence or second home, with investment property allowed only on the depletion path. For a pure rental purchase, the better fit is usually a different 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. The complete DSCR loans guide explains when that route fits better.
Practitioner observation: across the wholesale network, the most common surprise is not the formula but the paperwork. Borrowers run the math on their full balances and forget that percentages and exclusions shrink the number. Run the haircuts before you fall in love with a house.
What Is the Step-by-Step Path From Prep to Settlement?
The sequence matters more than any one number. Work in this order.
1. Inventory your accounts. List every balance, its type and its age. Mark which ones are retirement, which are cash and which are held in someone else’s name.
2. Pick your path. If usable assets reach the loan amount, look at the qualifier path first. If they fall short but income would clear DTI, look at depletion.
3. Season the money. Stop moving funds between accounts. Keep statements clean.
4. Get reviewed before you shop. A lender in the network reviews statements, credit and the old mortgage’s treatment, so you know your ceiling.
5. Write the offer. With the review in hand, your agent can submit a non-contingent offer. Your agent can confirm what the current Virginia form says.
6. Handle the new loan. The lender reviews the property, appraisal and credit. You sign standard consumer disclosures.
7. List and sell the old home. Price it for the market and keep a carrying plan ready.
8. Settle both. Virginia settlement practice runs through a title or settlement company, which coordinates payoff and proceeds.
Is This Right for You?
This fits you if your balances are large and your documented income is not. Typical readers are retirees, business sellers, people who received an inheritance or a settlement, early-retired professionals and households living on a portfolio.
It is likely a poor fit if you have strong, well-documented income. A conventional or bank-statement path can cost less in that case, as a practitioner piece on asset depletion for investors also notes. The bank statement program is for borrowers who document income with deposits, which is a different test. It is also a poor fit if your wealth sits mainly in the old home, in crypto or in pledged accounts.
What if the Old Home Does Not Sell?
Plan for the old home sitting on the market, because it can. The risk is a double carry: two sets of housing costs until one property sells.
Build a runway before you write the offer. Decide how many months you can carry both homes from cash that is not part of the qualifying file. Set a price-reduction trigger. Know your exit, such as renting the old home out, which changes the picture and may point you toward a rental-focused loan later.
Keeping investments in place can mean not realizing a gain from selling them. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional.
The mistakes that cost people are predictable. Moving money right before applying. Assuming a listing agreement changes how the lender qualifies you. Confusing an asset-based mortgage with a securities-backed credit line, which is a different borrowing product. And counting on the sale proceeds to fund reserves that the lender wants in place first.
Key Terms Defined
Asset qualifier path: A path where eligible assets, after credit percentages, must equal or exceed the whole loan amount, with no income documented.
Asset depletion path: A path where eligible assets are divided by 60 months to create monthly qualifying income that runs through the DTI test.
Seasoning: The length of time money has sat in your accounts, shown by statements, before a lender will count it.
Haircut: The share of an asset’s balance the lender will not count, usually because the asset can lose value.
Sale contingency: A contract clause that makes your purchase depend on selling your current home.
Debt-to-income (DTI): Your total monthly debts divided by your monthly income.
Frequently Asked Questions
Do I have to sell my investments to use this loan?
No. Your assets stay in your accounts. The lender verifies and counts them, but nothing is sold or pledged. The 60-month division on the depletion path is a qualifying convention, not a withdrawal schedule. Keep the accounts seasoned and the statements clean through the whole process.
Does my current mortgage count against me?
It depends on the path. On the qualifier path, no income is documented, so the old payment is not tested against income. On the depletion path, the old payment counts in the DTI test unless the loan is paid off or the sale is documented. Confirm the treatment against the program’s guidelines.
Can I use retirement accounts?
Yes, subject to underwriting. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Accounts combine, and the lender reviews statements for each one.
Does this work for a second home or an investment property?
A second home is eligible on both paths. An investment property is eligible only on the depletion path, at up to 65% on a purchase and 60% on a cash-out. For a rental purchase, many investors find a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, is the better fit.
What if my old home sells before the new loan funds?
Tell the lender right away. A completed sale removes the old payment from the debt picture, which helps on the depletion path. Sale proceeds do not count as qualifying assets unless they are seasoned in a regulated account, per lender guidelines. Your agent and the settlement company coordinate the payoff.
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. Reach the team at 828-256-2183 or request a quote.
Lendmire’s asset-based mortgage in Virginia page presents the program for Virginia 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
1. Virginia REALTORS® contract changes insert (form copy)
2. Virginia sale-of-property addendum (form copy)
5. CFS Review: CFPB Addresses Non-QMs Under Ability-to-Repay Rule
6. HomeApproach: Buying Before Selling Guide
7. 4homes.com: Asset Depletion Loans for Investors
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 a FIRE Household · Asset Qualifier Mortgage vs Bank Statement Mortgage · Asset Qualifier vs Asset Depletion for an Heir
Guides: Asset-Based Mortgage in Virginia
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.