The Quick Read: An heir can borrow on inherited money or property once legal authority and title are in order. Through select programs, the inherited cash and investments can qualify the loan on their own, or be converted into monthly qualifying income. Which path fits depends on your balances, how the property is titled, and whether you plan to live in it or rent it.
- The asset qualifier path counts eligible assets against the entire loan and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create qualifying income.
- Authority and title come first. An heir in open probate with no court letters generally cannot borrow.
- The loan is sized on a new appraisal, not on any value the estate used.
- A rental you intend to hold for income usually belongs in a DSCR loan, which is business-purpose financing.
Which Path Fits an Heir?
Most heirs fit one of two profiles. Either the inheritance is large enough to cover the whole loan, or it is large enough to generate meaningful income on paper. Across the wholesale network Lendmire works with, these are two separate programs, and you qualify on one at a time.
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 assets are fully documented, though. “No income documentation” never means “no documentation.”
The asset depletion path. Usable assets are divided by 60 months. The result is a monthly qualifying income that must carry the housing payment and your other debts through the debt-to-income test. It also works for investment property, which the qualifier path does not cover.
Think of it this way. If the inheritance could pay off the loan outright, look at the qualifier path first. If it is large but you want to keep it invested, the depletion path turns it into income.
What Counts, and at What Percentage
Not every dollar counts at face value. Lenders apply a percentage to each asset type. These figures are typical of select programs and are subject to underwriting.
Asset qualifier path (share of balance that counts):
| Asset | Counts at |
|---|---|
| Brokerage accounts | 100% |
| CDs, money market, savings | 100% |
| 401(k) or IRA, under age 59½ | 90% |
| 401(k) or IRA, 59½ or older | 100% |
Asset depletion path (share of balance that counts):
| Asset | Counts at |
|---|---|
| Cash accounts and CDs | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Real-estate equity | 60% |
Inherited accounts are not a special asset class. A brokerage account you inherit counts like any brokerage account once it sits in your name. Accounts also combine on the qualifier path.
Some inherited items are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles and pledged or borrowed funds. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source. On the depletion path, custodial accounts, escrow accounts, foreign funds, stock options and non-vested restricted stock units are also ineligible.
Two Illustrative Examples
Say you want an $800,000 loan on the qualifier path. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). That is $800,000 of usable assets, which covers the loan on assets alone.
Now take the depletion path. You hold $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100%). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Both examples are illustrative. The lender’s own calculation governs.
Seasoning: Where Inheritance Gets a Break
Seasoning is how long funds must sit in your account before a lender counts them. On the qualifier path, expect 60 days of seasoning and two months of statements for each qualifying account. A freshly retitled estate account usually has to meet that clock.
The depletion path asks for statements at least 120 days old at application, plus the most recent statement on file. Inheritance funds, along with sale-of-business and legal-settlement funds, are excused from that seasoning. That exception is one reason heirs look at the depletion path.
Credit, Leverage and Loan Size
Credit works differently on each path. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700. A housing history of 0x30x12 is standard, though one 30-day late in the last twelve months is considered case by case.
Leverage depends on the path and the property:
- Qualifier path: up to 80% loan-to-value on a purchase and 75% on a refinance, for a principal residence or second home. Cash-out terms on this path are set by the lender and not published.
- Depletion path, principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Depletion path, investment property: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out.
Loans run up to $4,000,000 on the qualifier path and from $125,000 to $3,500,000 on the depletion path. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan. When asset depletion is your only income source, you also need at least $250,000 liquid. Cash-out proceeds never count as qualifying assets. All of this is subject to underwriting.
Before Any Lender Moves: Authority and Title
A lender can only take a lien on what you own. That makes legal authority and recorded title the real gate for heirs.
1. Legal authority. With a will, the court issues letters testamentary. Without one, it issues letters of administration. An heir in open probate without letters generally cannot borrow or sell.
2. Title vesting. A recorded deed to you, a trustee or an entity is normally required. Joint tenancy with survivorship can skip probate, depending on state law.
3. Co-heirs. Every co-owner must consent, or a buyout must close first. Agree on value and split in writing, because the lender orders its own appraisal.
4. Documents. Expect a death certificate, certified court letters, will or trust documents, a title commitment, the vesting deed and a payoff statement for any existing lien. Add insurance in your name, and a lease and rent roll if the property is rented.
5. Appraisal. The loan is sized on the new appraisal. The value the estate used for other purposes does not set the loan amount.
If one sibling is buying out the others, the buyout usually runs through a refinance once title vests. How the lender classifies it affects the leverage cap, so ask early.
What Happens to the Mortgage Already on the House
This is a separate question from getting new financing, and heirs mix them up. Federal servicing rules treat someone who receives an ownership interest through certain transfers as a successor in interest. Regulation X’s definitions list five transfer types. One is a transfer to a relative resulting from the borrower’s death.
Once the servicer confirms your identity and ownership interest, you generally get the same servicing protections as the original borrower. A qualifying transfer to a relative on death generally cannot trigger a payoff demand under the federal due-on-sale exception. The payments still have to be made.
Two limits matter for investors. These protections cover the existing loan only, and they do not create a new one. Whether the exception requires the heir to occupy the home is a question to confirm with counsel against the statute’s text before assuming it covers a rental.
The official interpretations offer a practical example. The eCFR’s commentary shows an heir offering an affidavit of heirship as confirmation. It also shows that where state law requires only a prior recorded joint deed, probate may not be needed. Both are servicing-confirmation examples, not underwriting rules for a new loan.
Where the General Rule Breaks
- Probate unfinished. Asset-based mortgages do not fit while the estate still holds title. Estate-level or bridge products are a different product.
- Inherited LLC. The membership interest is often a probate asset. Heirs may hold economic rights without signing authority, so the entity’s papers matter.
- Deeding a mortgaged property into an LLC. This can trip the existing loan’s due-on-sale clause. Vesting at the refinance closing, when the old loan is paid off, is cleaner. State law varies, so involve counsel.
- Trusts. Assets held in trust can qualify under the right documentation. See Lendmire’s piece How to Use Trust Assets to Qualify on an Asset Depletion Mortgage.
- Joint tenancy. A survivor with a right of survivorship may not need probate at all.
- Pure rentals. The asset-based programs here are consumer mortgages. A rental you will hold for income is business-purpose, and DSCR financing is the usual fit. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Entity-held rentals can often be financed in the LLC’s name, depending on program guidelines. Lendmire’s complete DSCR loans guide covers that route. Where rent is thin, some select lenders in the network offer programs below 1.00 coverage, though leverage and terms adjust.
What the Decision Looks Like in Practice
| Your situation | Likely route |
|---|---|
| Probate open, no letters | Wait; resolve authority first |
| Cash inheritance, you will live in the home | Qualifier path, if assets cover the loan |
| Large portfolio, want to stay invested | Depletion path |
| Inherited rental, keeping it as an investment | DSCR |
| Buying out siblings | Refinance after title vests |
Timing matters in two places. A fresh deed date can affect refinance eligibility, since seasoning is a lender overlay and not a law. And the title and leverage room must be big enough to cover the buyout plus closing costs.
Key Terms Defined
Heir: A person who receives property or money from someone who has died, by will or by law.
Successor in interest: An heir or relative who takes ownership of a mortgaged home and is recognized by the servicer.
Letters testamentary: The court document that gives an executor authority to act for an estate.
Seasoning: The time funds or title must be held before a lender counts them.
Asset depletion: A method that divides usable assets by 60 months to produce qualifying income.
Due-on-sale clause: A loan term that lets the lender demand payoff when ownership transfers.
Frequently Asked Questions
Can I get a mortgage before probate closes?
Usually not an asset-based one. Without court letters and recorded title, there is no one with authority to pledge the property. Once the court names an executor and title vests, financing becomes possible, subject to underwriting.
Do inherited funds need seasoning?
It depends on the path. The qualifier path wants 60 days and two months of statements per account. The depletion path excuses inheritance funds from its 120-day statement seasoning, though the most recent statement must still be current, with exact requirements varying by file and lender.
Does an inherited retirement account count?
Yes, at the program percentage. On the qualifier path it counts at 90% under 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age.
Do I have to refinance the loan on the house I inherited?
Not necessarily. A qualifying transfer to a relative on death generally blocks a payoff demand, but you must keep paying. Refinancing is your choice, such as for a sibling buyout.
Can I use inherited assets to buy a rental?
Through select programs, yes, on the asset depletion path, which allows investment property at 65% on a purchase. If the rental will be held for income, DSCR financing is often the better fit.
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. Lendmire is a broker that arranges these loans through select lenders in its network, with consumer mortgage lending in 16 states, and you can start with the assets-only mortgage overview. Programs change, every file is underwritten individually. This is not a commitment to lend.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
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
1. CFPB Regulation X, § 1024.31 definitions
2. eCFR, Supplement I to Part 1024
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 Big Can an Assets-Only Mortgage Be? · How to Qualify for a Mortgage on Liquid Assets Alone · How Asset Depletion Mortgage Eligible Assets Work on a Jumbo Loan
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.