ASSET DEPLETION LOANS
Mortgage Qualification Using Eligible Assets
Not every financially strong borrower receives most of their income from a traditional paycheck.
Retirees, business owners, investors and high-net-worth borrowers may have substantial savings and investments but comparatively little income shown on tax returns or other traditional income documentation.
An asset depletion mortgage may provide another way to qualify. Rather than relying solely on employment income, certain loan programs may calculate qualifying income based on a borrower’s eligible assets.
At Platinum Lending Solutions, we work with multiple wholesale lenders offering asset-based and asset depletion mortgage programs for qualified borrowers in Oregon and Washington.
Your Financial Strength May Extend Beyond Monthly Income
Certain mortgage programs may use eligible savings, investments and other qualifying assets to help establish monthly income for underwriting purposes.
What Is an Asset Depletion Mortgage?
An asset depletion mortgage—sometimes referred to as an asset utilization loan—uses eligible borrower assets to help establish qualifying income for mortgage underwriting.
Depending on the loan program, a lender may take a portion of eligible assets and apply a specific calculation to determine an amount of monthly qualifying income.
This doesn’t necessarily mean the borrower must liquidate or spend those assets to make the mortgage payments.
Instead, the assets are used as part of the lender’s method for evaluating the borrower’s financial capacity.
Asset Depletion Programs May Be Available For
Primary Residences
Second Homes
Home Purchases
Rate-and-Term Refinances
Cash-Out Refinances
Available transactions and occupancy types vary by lender and program.
Who May Benefit From an Asset Depletion Loan?
Asset depletion financing may be worth considering for borrowers who have significant assets but don’t receive enough traditional qualifying income to meet standard mortgage requirements.
May Include
• Retirees
• High-net-worth borrowers
• Investors
• Business owners
Other Financial Profiles
• Borrowers living primarily from savings or investments
• Borrowers with substantial brokerage or retirement accounts
• Individuals transitioning from employment into retirement
• Borrowers whose financial strength isn’t accurately reflected by traditional income documentation
Asset depletion can also be useful when a borrower has some qualifying income but needs additional income to qualify for the desired mortgage.
How Does Asset Depletion Work?
The exact calculation depends on the loan program.
Generally, the lender identifies assets that are eligible for the program, applies any required reductions or exclusions, and then uses a specified formula to convert the qualifying assets into a monthly income amount for underwriting purposes.
The Asset Depletion Process
1
Identify Eligible Assets
The lender determines which borrower assets may be eligible under the specific loan program.
2
Apply Adjustments
Required reductions, exclusions or other program-specific adjustments may be applied.
3
Calculate Monthly Income
A specified formula is used to convert qualifying assets into an amount of monthly qualifying income.
4
Complete Mortgage Review
The calculated income is considered together with the borrower’s overall financial profile and applicable loan requirements.
What Types of Assets May Be Considered?
For example, certain programs may consider eligible funds held in accounts such as:
Bank Accounts
Checking and savings accounts
Money market accounts
Investment Assets
Stocks, bonds and mutual funds
Brokerage accounts
Retirement & Other Assets
Certain retirement accounts
Other eligible liquid or investment assets
Not Every Asset Is Treated the Same
Not every asset receives the same treatment, and not every account or asset will necessarily qualify.
The borrower’s age, access to the funds, account ownership, source of assets and whether funds are also being used for the down payment, closing costs or required reserves can affect the calculation.
Asset Depletion Loan Requirements
There is no single asset depletion formula or set of requirements that applies to every mortgage program.
Depending on the lender and loan type, underwriting may consider:
✓ Type and amount of eligible assets
✓ Ownership and accessibility of the assets
✓ Funds required for down payment and closing costs
✓ Required cash reserves
✓ Existing income sources
✓ Credit history and credit score
✓ Loan amount
✓ Property type and occupancy
✓ Purchase or refinance transaction
✓ Overall borrower financial profile
Some asset depletion options may be available within traditional mortgage programs, while others may be offered through non-QM or alternative-documentation loan programs.
Asset Depletion vs. Traditional Income Qualification
Traditional Income Qualification
Traditional mortgage underwriting generally relies on documented income such as wages, self-employment earnings, retirement income, Social Security, pensions or investment income.
For borrowers with significant assets, those income sources may tell only part of the financial story.
Asset Depletion Qualification
Asset depletion provides another way to evaluate a borrower’s ability to qualify by recognizing eligible assets as a potential source of calculated monthly income.
In some situations, asset depletion may be used alongside other qualifying income rather than replacing it entirely.
The appropriate approach depends on the borrower’s financial profile and the available loan programs.
Asset Depletion vs. Bank Statement Loans
Both programs can provide alternatives when traditional income documentation doesn’t adequately reflect a borrower’s financial capacity, but they solve different problems.
Bank Statement Loan
A bank statement loan generally evaluates eligible deposits and cash flow and is commonly used by self-employed borrowers.
Asset Depletion Loan
An asset depletion loan generally focuses on accumulated eligible assets and may be particularly useful for retirees, investors and high-net-worth borrowers.
A borrower with both substantial assets and self-employment income may potentially have more than one qualification strategy worth evaluating.
Why Lender Selection Matters
Asset depletion guidelines and calculations can vary considerably among lenders.
One lender may treat a particular asset differently from another, use a different calculation method or have different requirements regarding reserves, retirement accounts or funds needed to close.
As an independent mortgage broker, Platinum Lending Solutions can evaluate programs available through multiple wholesale lending sources rather than relying on the guidelines of a single bank.
For borrowers with significant assets or complex financial profiles, comparing the available qualification methods can be just as important as comparing the loan itself.
Asset Depletion Loans in Oregon & Washington
Platinum Lending Solutions helps borrowers throughout Oregon and Washington evaluate mortgage solutions for financial situations that don’t always fit neatly into traditional underwriting.
If you have substantial assets but your income documentation is making mortgage qualification difficult, we can review your financial picture and determine whether asset depletion, traditional financing or another alternative-income program may provide an appropriate path.
Could Your Assets Help You Qualify?
Having significant financial resources doesn’t always translate neatly into traditional mortgage qualifying income.
Tell us a little about your situation and what you’re trying to accomplish. We can review the available mortgage options and determine whether an asset depletion strategy may make sense for you.
Review Your Mortgage Options
We can review your assets, income and mortgage goals to determine which available qualification strategies may be worth considering.
