Asset Depletion Mortgages: How to Qualify Using Assets Instead of Income

What happens when you have significant wealth in the bank but no regular income to show a lender? This is the challenge facing retirees, entrepreneurs who have sold businesses, trust fund beneficiaries, and others who are asset-rich but show limited traditional income.

Asset depletion mortgages solve this by converting liquid assets into a calculated monthly income figure for qualification purposes — without requiring you to actually liquidate anything.

How Asset Depletion Income Is Calculated

The most common calculation: divide eligible liquid assets by the number of months remaining in the loan term. The result is treated as monthly qualifying income.

Example: $2,000,000 in eligible liquid assets divided by 360 months (30-year loan) equals $5,556 per month in calculated income.

What Qualifies as Eligible Assets

Checking and savings accounts, money market accounts, brokerage investment accounts, retirement accounts with a discount — typically 60 to 70% — to account for taxes and early withdrawal penalties, and proceeds from recently sold assets all typically qualify.

Assets that generally do not qualify: real estate equity until liquidated, unvested stock options, business assets, and illiquid investments.

Who Benefits Most from Asset Depletion

Retirees with significant savings but minimal pension or Social Security income. Entrepreneurs who have exited a business and hold the proceeds in investment accounts. Trust beneficiaries. Investors with significant portfolio income that is variable year to year.

Asset Depletion vs. Bank Statement Loans

Asset depletion uses what you have saved. Bank statement loans use what you earn and deposit. If your assets are liquid but not generating consistent cash flow, asset depletion is the right tool. If your business generates strong regular deposits, bank statements may be more effective.

At East Coast Mortgage, we structure asset-based mortgages through lenders specializing in high-net-worth borrower scenarios. Book a call to discuss your situation.