The Quick Read: You attach the letter to your offer along with statements that prove the assets behind it, then pair both with a financing window written into the contract. The letter shows a seller that a lender has reviewed your credit and your assets, even though no paychecks are involved. It is conditional, so it only works if the property, the appraisal, and your balances all hold through closing.
- Pick your path first. The asset qualifier path uses assets to cover the whole loan. The asset depletion path turns assets into monthly qualifying income.
- Ask the lender to size the letter to your offer price, not your ceiling.
- Attach statements that already meet the program’s seasoning rules.
- Keep your offer’s financing contingency honest. Waiving it shifts the risk to you.
- Do not move money between the letter and closing without telling your loan officer.
What Is an Asset-Based Pre-Approval Letter?
An asset-based pre-approval letter is a lender’s written statement that your credit and verified assets support a loan up to a stated amount, on a stated property type, with conditions still open. The qualifying basis is your balance sheet, not your pay stub.
This letter suits cash-rich, income-light buyers. Think of retirees, someone who just sold a business, an heir, a person living on a portfolio. Their balances are large and their documented income is small.
The program has two paths, and a borrower is reviewed on one at a time.
On the asset qualifier path, eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented.
On the asset depletion path, eligible assets are discounted, added up, and divided by 60 months. The result is a monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Both paths document the assets in full. There is no traditional personal-income documentation, such as pay stubs or employment verification, on the qualifier path, but every file is fully underwritten and the assets are proven with statements. Everything below is a guideline range through select programs, subject to underwriting.
Key Terms Defined
Pre-approval letter: A lender’s written statement that your credit and verified assets support a loan up to a stated amount, with conditions still open.
Proof of funds: Account statements showing you hold the cash and assets for the down payment, closing costs, and any required reserves.
Seasoning: The length of time money has sat in an account, or the age of the statements that show it.
Financing contingency: A contract clause that lets you cancel or renegotiate if the loan falls through for reasons the clause covers.
Loan-to-value (LTV): The loan amount divided by the lower of the purchase price or the appraised value.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, divided by your monthly qualifying income.
Haircut: The share of an asset’s balance the lender discounts because the asset can swing in value or is hard to reach.
Which Path Does Your Letter Sit On?
If your assets can cover the whole loan outright, the qualifier path is cleaner. If your assets are large but you want them turned into income, the depletion path fits. Here is the side-by-side, drawn from the guidelines of the select lenders Lendmire places these files with.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Eligible assets ≥ whole loan | Assets ÷ 60 months, then DTI |
| Purchase leverage | Up to 80% LTV | Up to 80% (home), 65% (investment) |
| Refinance leverage | Up to 75% LTV | Rate-and-term as purchase; cash-out 60% |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Statements | Two months per account | 120-day-old plus one within 45 days |
| Credit | 600 minimum score | The lender’s matrix |
On the depletion path, “home” means a principal residence or second home. Investment property is available only on the depletion path. Cash-out proceeds never count as qualifying assets.
Whether cash-out is allowed on the qualifier path is set by the lender and is not published, so ask before assuming.
What Counts, and at What Percentage
The percentages decide how big a letter you can get. Keep the two paths separate, because each path has its own list of percentages.
Qualifier path: Brokerage accounts, certificates of deposit, money market, and savings count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
Depletion path: Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, and retirement accounts at 70% at any age. Real-estate equity counts at 60%.
Some assets are not eligible on the depletion path. Those 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 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. The lender then reviews the source. Tax treatment varies; consult a qualified professional before selling holdings to fund a purchase.
Worked Examples
These shapes show the arithmetic. The lender’s own calculation governs.
Qualifier path. Picture an $800,000 loan. You hold $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) while under 59½ (90% = $270,000), and $200,000 in savings (100% = $200,000). That counts $800,000 of usable assets. The loan is reviewed on assets alone, subject to underwriting.
Depletion path. Say you hold $1,500,000 in securities (80% = $1,200,000) plus $300,000 in cash (100% = $300,000). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income.
The depletion path also has minimum assets. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you need at least $250,000 liquid. A first-time investor on this path needs a 700 credit score. Asset income can also supplement documented income up to a 45% DTI. In that case the minimum-assets rule is waived. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
What the Letter Should Say
A listing agent reads the letter in under a minute. Make sure every line earns its place. Ask your loan officer to confirm each item below.
- Your name and the lender’s contact information. Agents often call.
- A loan amount that matches your offer. A letter for the exact address and price reads stronger than an open “up to” amount. That is a broker’s view, not a rule.
- Loan type and property type. An asset-based mortgage is unfamiliar to many agents, so the letter should name the program plainly.
- What was reviewed. Credit, assets, and statements are the key items. Ask the lender to say so.
- Open conditions. Appraisal, title, insurance, and continued eligibility are typical.
- An expiration or refresh note. Letters do not last forever.
Do not put your total balances on the letter. The seller needs to know the loan is supported. They do not need to know how much more you hold. That is also why sizing the letter to the offer matters. A letter showing your maximum tells the other side your ceiling.
Pre-Approval, Prequalification, and Conditional Approval
Lenders use these labels loosely. The Consumer Financial Protection Bureau notes that the terms are used inconsistently and that a preapproval rests on assumptions rather than a binding loan offer. The label matters less than the review behind it.
Ask your lender three things. Was credit pulled? Were the statements actually reviewed? What is still unverified? A letter built on reviewed statements is the one a seller can trust.
Step by Step: Making the Offer
1. Choose your path and gather statements. Pull every statement for the accounts you plan to use. On the qualifier path, you need two months per account and 60 days of seasoning. On the depletion path, you need statements at least 120 days old plus the latest one within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning on the depletion path.
2. Share a target deal profile. Give the loan officer a price range, property type, and occupancy. State whether it is a primary home, second home, or investment property. Occupancy changes the leverage you can use.
3. Get a letter sized to the offer. Ask for it to match the price you intend to offer, with room for negotiation but not your ceiling.
4. Write the offer package. Include the letter, proof of funds for the down payment and closing costs, and a financing contingency with a defined window. Sellers weigh certainty alongside price. A financing-contingency explainer from Corporate Finance Institute notes that sellers in busy markets favor offers with fewer contingencies. It also warns that waiving the clause removes your protection.
5. Go under contract. The lender orders the appraisal. Value sizes the loan, because leverage is based on the lower of price or appraised value.
6. Clear the conditions. Underwriting, title, and insurance turn the letter into a commitment. Your balances must still support the loan on the day you close.
How to Present It to a Listing Agent
Many listing agents have seen only conventional letters. Expect a question or two.
Send a short cover note with the offer. Say that the buyer is qualifying on verified assets, that the lender has reviewed credit and statements, and that the loan officer will take the agent’s call. Attach proof of funds the same way a cash buyer would.
Do not apologize for the program. It is a documented loan, and it is underwritten like any other. You are not asking the seller to take a leap. You are pointing out that the file is verified.
Brief your own agent before you offer. Walk through which path you are on, what the letter covers, and what is still open. An agent who can answer questions calmly is worth more than a longer letter.
Contingencies, Earnest Money, and the Contract
The letter does not replace the financing contingency. A preapproval lowers the odds of a denial, but the contingency is what protects you if the loan still falls through. If you waive it, you risk your earnest money when something goes wrong. The same logic applies to the appraisal contingency, which ConsumerAffairs explains as the clause that lets a buyer renegotiate or exit if the appraisal comes in low.
Two contract terms deserve a slow read. First, the length of your contingency window should leave room for statements, an appraisal, and underwriting. It is a contract term, not a lender promise. Second, any clause that commits you to cover an appraisal gap is a binding cash obligation. Wording varies by state form and by whether the sale is as-is, so read the actual clause with your agent.
A quick tradeoff: shortening or waiving contingencies can win a bid, but it moves the risk of a low appraisal onto you. That works when you hold extra cash outside the qualifying assets. It is dangerous when every dollar is already counted.
Competing Against Cash and Conventional Offers
Financed buyers often compete against cash. In NAR’s monthly REALTORS Confidence Index, roughly 27% of recent transactions were cash. It is a Realtor survey, not a census.
An asset-based letter narrows the gap. A seller sees a lender-reviewed file, proof of funds, and a clear contingency window. Beyond that, the usual levers apply. A clean contingency window, a reasonable earnest-money deposit, and a flexible closing date can do more than a few extra dollars of price.
Where the General Rule Breaks
Here are the edge cases that trip buyers.
Large new deposits. A big deposit with no history will draw questions. Qualifier-path assets need 60 days of seasoning. Move money early and keep a paper trail. For non-eligible assets, convert them to cash well before you apply.
Retirement accounts. On the qualifier path, they count at 90% before 59½. On the depletion path, they count at 70% at any age. The same $300,000 counts for different amounts on each path.
Market drops. Securities fluctuate. If your plan depends on stocks, a drop between letter and closing can shrink usable assets. Ask the lender how a refreshed statement is treated, and keep a cushion.
Investment property. Investment property is available only on the depletion path, at up to 65% LTV on a purchase or rate-and-term refinance and 60% on a cash-out. That is a consumer program, so it does not apply to a pure rental play run through an entity. For that, business-purpose rental financing is DSCR. 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 ratio compares monthly rent to the full monthly housing obligation. Select lenders in the network will review sub-1.00 coverage, with leverage and terms adjusted. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Rent documentation on rentals. On a DSCR file, an appraiser documents market rent on a rent schedule. The Freddie Mac form 1000, the same form commonly called 1007, is built on comparable rentals with adjustments only for significant differences. DSCR lenders borrow the form. It is not DSCR-specific. The asset-based consumer path does not use rent at all.
Short-term rentals. They use different income documentation than a rent schedule or a lease. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Loan size. The qualifier path reaches $4,000,000.
Credit events. A housing event needs 4 years of seasoning on the depletion path. Multiple bankruptcies are not eligible. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case.
Between Offer and Closing
Treat your accounts as frozen. The file was approved on the balances the lender saw.
- Do: keep statements coming and keep qualifying accounts where they are.
- Do: tell your loan officer before any transfer, sale, or withdrawal.
- Do: keep extra cash outside the qualifying assets for closing costs and surprises.
- Don’t: open new credit lines or finance a car or furniture.
- Don’t: move funds into accounts that have not been seasoned.
- Don’t: let the letter’s refresh date lapse while you are still shopping.
Because this is a consumer mortgage on a home, standard consumer mortgage disclosures apply. Business-purpose DSCR loans are exempt from them.
Common Mistakes
Treating the letter as final approval. It is conditional. Appraisal, title, insurance, and continued eligibility still decide the outcome.
Showing your ceiling. A letter for the maximum tells the seller your top number.
Mixing up the paths. Quoting qualifier percentages on a depletion file produces a letter you cannot use.
Counting assets that do not count. Cash on hand, foreign funds, and stock options are out on the depletion path.
Waiving the financing contingency to look strong. If the numbers move, the risk is yours.
Assuming a lower price raises everything. On a depletion file, a lower price helps only if it shrinks the loan against your income.
Frequently Asked Questions
Will a seller accept an asset-based letter as readily as a conventional one?
Most sellers care about verified financing, not the program’s name. A letter that says what was reviewed, with proof of funds attached, tends to land well. A short cover note and an offer to connect the agent with your loan officer help. Acceptance is never certain, so your terms still matter.
Can I make an offer before I know which path I’m on?
You can, but it is risky. The paths use different asset percentages, leverage, and statement rules, so the letter amount depends on the choice. Settle the path with your loan officer first, then size the letter to your offer.
Does the letter lock my terms?
No. It signals eligibility under assumptions. Final terms depend on underwriting, the appraisal, and your file at closing. Treat it as a starting point.
How do I handle a letter if I’m selling a business or receiving a settlement?
On the depletion path, funds from the sale of a business, an inheritance, or a legal settlement are excused from the usual seasoning. You still need statements showing the money in a regulated account. Ask your loan officer which documents support the source.
Can I use this to buy a rental?
Investment property is available only on the depletion path, at lower leverage than a primary home or second home. For rental purchases run as a business, DSCR financing qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Next Steps
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, and the consumer program is available in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington, subject to underwriting. Every figure here is a guideline range, not an offer or a promise to lend.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. 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
2. Corporate Finance Institute: Financing contingency
3. ConsumerAffairs: What is an appraisal contingency?
4. NAR REALTORS Confidence Index
5. Freddie Mac Form 1000 (comparable rent schedule)
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 Does Asset Seasoning Take After an Inheritance? · How to Buy Before You Sell in Alabama Using an Asset Qualifier Mortgage · Can You Use an Asset-Based Mortgage to Buy a Pennsylvania Home for Your Parents?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.