The Quick Read: Usually not the pledged portion. Lenders generally remove any securities that are pledged or tied to margin debt before they total your assets, so only the unencumbered remainder can count, subject to underwriting and the program’s credit percentages. A margin account with a zero balance is a different situation from one with a loan against it.
- Pledged or margined holdings are generally netted out before the lender counts anything.
- On the asset qualifier path, brokerage accounts count at 100% of the unencumbered balance, subject to underwriting.
- The assets must cover the entire loan amount, and the accounts need 60 days of seasoning.
- A margin account with no balance usually reads differently from one with a loan against it.
- Paying down or releasing the loan before you apply is often the cleanest fix.
If you hold most of your wealth in a brokerage account and have borrowed against it, this is the question that decides whether your portfolio is as big as it looks. A large statement balance can shrink fast once the borrowed and pledged pieces come out.
Key Terms Defined
Asset qualifier mortgage: a consumer home loan where eligible assets must cover the whole loan amount, and no employment or income is documented.
Asset depletion: a separate path that divides usable assets by 60 months to create a monthly qualifying income.
Margin balance: money you owe a brokerage because you borrowed against the securities in the account.
Securities-backed line of credit: a credit line secured by your portfolio. Many are called pledged asset lines.
Pledged asset: a holding that secures a debt, so a creditor has a claim on it.
Encumbered asset: any asset with a lien, hold, or restriction on it. Pledged assets are one kind.
Maintenance call: a demand to post more collateral or repay when the portfolio value drops.
Why Does the Pledged Part Come Out?
A lender can only count what will still be there. Pledged securities may not be.
A margin loan or securities-backed credit line gives the brokerage or bank a claim on your holdings. FINRA explains that if the securities fall too far, you face a maintenance call and must add collateral or repay. If you can’t, the firm can sell the securities and keep the cash. The SEC and FINRA joint investor alert describes the same mechanics, with a window that is typically only two or three days.
So the logic is simple. A balance that someone else can seize on short notice is not a dependable source of repayment. Across the programs we place files with, the pledged portion comes out first. What remains still has to meet the program’s own rules, and each lender’s matrix controls the final treatment.
The subtraction idea itself is widely shared across lending.
How the Lender Works Through a Securities Account
Think of it as a funnel. Each step shrinks the number.
1. Inventory the accounts. The lender looks at which accounts are yours, liquid, and verifiable.
2. Collect statements. On the asset qualifier path, that means two months of statements for each qualifying account and 60 days of seasoning.
3. Find the encumbrances. A margin loan, a pledged asset line, or a control agreement shows up on statements or in the loan paperwork.
4. Net the pool. The pledged or borrowed portion comes out, along with funds already earmarked for the down payment and closing costs.
5. Apply the credit percentage. Brokerage accounts count at 100% on this path. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older.
6. Compare to the loan. The remaining usable assets must equal or exceed the entire loan amount.
Every program is underwritten individually, and the lender’s own calculation governs. The sanctioned shape of the math looks like this. An $800,000 loan with $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000) totals $800,000 of usable assets. That file is reviewed on assets alone, subject to underwriting.
Now add a margin balance. If part of that brokerage account secures a loan, the netted amount drops, and the total may fall short of the loan. Same portfolio on paper. Different answer.
Margin, Credit Line, Pledged-Asset Mortgage: Three Different Things
People use “pledged” to mean at least two different things, which is where most of the confusion starts. Here is the split.
| Item | What it is | Typical treatment |
|---|---|---|
| Margin balance | Loan from your broker against account holdings | Securities treated as encumbered to the extent of the loan |
| Securities-backed credit line | Credit line secured by your portfolio | Pledged securities generally don’t count as assets |
| Pledged-asset mortgage | Home loan where securities add collateral | A separate structure, not asset qualification |
| Asset qualifier mortgage | Assets cover the loan; nothing pledged to the lender | Unencumbered balances count at program percentages |
The last two are not interchangeable. In a pledged-asset mortgage, your securities stay invested as extra collateral, often to reduce a down payment. In an asset qualifier mortgage, the lender does not take your portfolio as collateral at all. It simply checks that your assets are large enough to cover the loan. So when a page says “nothing is pledged,” it means to the mortgage lender. It says nothing about what you already pledged elsewhere.
The Edge Cases
A margin-enabled account with a zero balance. Nothing is borrowed, so no debt sits against the securities. The lender’s worry is the debt, not the feature. Expect a request for statements showing no margin loan. How a particular program handles it is the lender’s call, so ask early.
A margin balance outstanding. This is collateralized debt. Chase’s investor education notes the brokerage can sell securities if equity falls short. A lender can reasonably treat the securities as encumbered, wholly or up to the loan amount. In a partial case, expect the lender to decide how much of the balance to allocate against which holdings.
A pledged asset line drawn for the down payment. Schwab’s pledged asset line page describes a non-purpose line, meaning proceeds can’t buy securities or go into a brokerage account. Schwab’s own education material adds that these are demand lines that can be called at any time. The pledged securities should not also count as qualifying assets. On this program, pledged or borrowed funds are not published as eligible, so the documented route is converting them to a seasoned cash balance in a regulated account that the lender reviews. Other mortgage programs differ. For example, the Fannie Mae Selling Guide accepts borrowed funds secured by an asset for the down payment, closing costs, and reserves. That is that agency’s rule for its own loans, and it does not carry over here.
Retirement accounts. Schwab’s pledged asset line doesn’t accept retirement assets as collateral. So those accounts usually stay unencumbered and can count at the program’s retirement percentage.
Concentrated positions. A portfolio heavy in one stock can drop sharply on a single event and trigger a maintenance call. A lender looking at stability may view that holding with more caution.
Joint and trust accounts. Ownership and access matter. If an account carries a pledge, expect the lender to ask who owns what and who can withdraw.
What Changes on the Asset Depletion Path
Everything above assumed the asset qualifier path. The asset depletion path uses different numbers, and a borrower is qualified on one path at a time.
On depletion, securities count at 80%, cash and CDs at 100%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. The usable total is divided by 60 months to produce monthly qualifying income, which then runs through the debt-to-income test. Pledged and borrowed funds still aren’t published as eligible, so the same netting step applies before the haircut.
The illustration: $1,500,000 in securities (80% counts, $1,200,000) plus $300,000 in cash (100%) gives $1,500,000 usable. Divided by 60 months, that’s $25,000 of monthly qualifying income, which then has to carry the housing payment and other debts. Illustrative only, and the lender’s own calculation governs.
Depletion also requires statements at least 120 days old plus one within 45 days. Lendmire’s piece How Lenders Count Assets Toward an Asset Depletion Mortgage walks through the haircuts in more detail.
Before You Apply: A Short Checklist
- Pay down or release the margin or credit line balance before the application, if you can.
- Get a written payoff or release confirmation showing the pledge is gone.
- Let the statements catch up. Seasoning is counted on statements, so a release that happened last week won’t show up in a two-month history.
- Ask directly how the lender treats a margin-enabled account with no balance.
- Avoid using one pool of money twice. The same dollars can’t serve as qualifying assets and as collateral for something else.
- Keep funds documented. Assets are documented on both paths. No income documentation never means no documentation.
If selling is the cleaner route, Lendmire’s article Do You Have to Liquidate Assets to Reserve an Asset Qualifier Mortgage? covers that decision.
The Investor Angle
Many investors hold their wealth in brokerage accounts and borrow against it for a down payment. That works as a funding move. It does not make the same portfolio count twice.
Borrowing against securities also adds liquidation risk, including forced sales and unintended tax consequences. In a falling market, a maintenance call could land in the middle of a closing or a renovation. Tax treatment varies; consult a qualified professional.
One more point of positioning. If you are buying a pure rental property, an asset-based home mortgage is usually the wrong tool, because it is a consumer loan built around a residence. Business-purpose rental financing is DSCR, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. In that case securities matter mostly for cash to close and reserves. Lendmire’s complete DSCR loans guide explains how that path works. On the asset-based side, investment property is available only on the depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, through select programs.
What Varies by Lender
Honestly, the treatment of margin and pledged holdings is where lenders differ most. Some net the full margin balance. Others look at how the account is structured. Credit also differs: the qualifier path has a 600 minimum score, while the depletion path follows the lender’s matrix. Qualified assets on depletion must meet minimums as well. Nothing here is an offer, and every file is underwritten individually.
Frequently Asked Questions
Does a margin account with no balance still count?
Generally yes, because nothing is borrowed against the securities. The lender will likely want statements showing a zero margin loan. Treatment still depends on the program and underwriting.
If I pledged only some holdings, do the rest count?
Usually the unpledged holdings can count at the program’s percentage. The lender decides how a loan balance is allocated between pledged and unpledged assets, so ask before you assume the split.
Can a pledged asset line fund my down payment?
The cash may help with cash to close if the program accepts borrowed funds, but the securities pledged to the line shouldn’t also count as qualifying assets. Borrowed and pledged funds aren’t published as eligible on this program, so the usual fix is a seasoned cash balance in a regulated account.
Does paying off the margin loan fix the problem?
It often does, once the payoff shows up on statements. Because the qualifier path needs two months of statements per account and 60 days of seasoning, timing the paydown ahead of your application matters.
Do retirement accounts get the same pledged treatment?
Retirement accounts usually can’t be pledged to a securities line, so they commonly stay unencumbered. They count at 90% under 59½ and 100% at 59½ or older on the qualifier path, and 70% on depletion, subject to underwriting.
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. Consumer mortgage lending through Lendmire’s network is available in 16 states, as a broker arranging loans through select lenders. This is not a commitment to lend.
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. FINRA
2. SEC/FINRA Investor Alert on Investor.gov
5. Fannie Mae
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Do Mutual Funds Count on an Asset Qualifier Mortgage? · Can You Recast an Asset Qualifier Mortgage After a Windfall? · Does an IRA Count on an Asset Qualifier Mortgage?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.