Many believe getting a mortgage always requires steady work and monthly paychecks. However, this is not always true. Some borrowers have large savings but little employment income. For them, another loan choice exists. This option is called asset depletion loans, and it opens a path to homeownership or refinancing without relying on job earnings.
Income from Assets
Lenders use your existing assets to estimate income for qualification. They calculate monthly income by dividing your liquid assets over a chosen period of months. In addition, that calculated amount becomes your qualifying monthly income. This approach allows savings and investments to serve as proof of repayment ability. Therefore, your money works for you even without wages. (Learn more about “Self-employed? Here’s How to Get a Mortgage with Alternative Income Documentation”.)
Ideal for Retirees
This type of loan is especially helpful for retirees. Many retired people stop working, yet they hold retirement accounts or large savings. Moreover, traditional lenders may not treat those savings as income. Hence, retirees can still purchase or refinance homes with this loan program. They use accumulated assets as evidence of repayment strength. As a result, retirement does not prevent home financing opportunities.
Wide Asset Options
You are not limited to only basic cash savings. Eligible assets often include checking accounts, savings accounts, certificates of deposit, stocks, bonds, and retirement accounts. Furthermore, some lenders may also consider vested portions of retirement funds. Clearly, you can strengthen your loan application by including multiple asset types. Indeed, this broad list makes the program more accessible for many financial profiles.
Credit Still Matters
Although your assets play the main role, lenders still review credit history closely. A strong credit report shows responsibility and reduces risk. Importantly, you may also need to demonstrate sufficient reserves after closing, leaving funds untouched for future use. Healthy credit combined with solid reserves creates a favorable application. Therefore, maintaining positive credit habits remains an important requirement. (Find out more about “Can You Use Seller Credits with Down Payment Assistance? Yes— Here’s How It Works”.)
Flexible Home Financing
These loans provide a way to buy or refinance without depending on employment income. They suit people who are retired, self-employed, or living mainly off investments. Definitely, lenders recognize assets as valid income instead of rejecting applicants for lacking pay stubs. Besides, this flexibility makes homeownership possible for those with nontraditional financial situations. Without a doubt, savings unlock new housing possibilities with the right lender. (Read more about “Consolidate Debt Using a HELOC or Cash-Out Refinance to Simplify Your Finances”.)
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Takeaways
Not every borrower fits the picture of traditional employment. Some have wealth in savings or investments instead of steady paychecks. For them, asset depletion loans offer a valuable solution. Indeed, these loans expand financing access by turning assets into qualifying income. In short, your financial strength can still support your housing goals whether you are retired, self-employed, or between careers. (Discover more about “Non-QM Loans: A Flexible Solution for Self-Employed Borrowers and Unique Situations”.)