Asset-Based Mortgages: Qualifying on Your Savings and Investments

What an Asset-Based Mortgage Actually Qualifies You On

Some borrowers don't have a steady paycheck, a business bank account full of deposits, or a stream of 1099s — what they have is savings. Maybe you sold a business, inherited assets, built a substantial investment portfolio, or simply saved aggressively over a long career. An asset-based mortgage is designed for exactly that situation: instead of documenting employment or ongoing income at all, we calculate qualifying income directly from your assets.

The Formula: Assets Divided by 60 Months

The 60-month (five-year) divisor is a standardized way of converting a lump sum of assets into a monthly income figure without assuming an unrealistically fast drawdown. It's conservative by design — a shorter divisor would produce a higher monthly income figure but would also imply spending down assets faster than most borrowers actually intend to. The five-year window is meant to reflect a reasonable, sustainable pace.

The math behind this program is straightforward. We add up your eligible assets — checking accounts, savings accounts, stocks, bonds, 401(k) balances, and IRA balances — and divide that total by 60 months (five years) to arrive at a monthly qualifying income figure.

Here's a simplified example of how that plays out:

Asset Type	Balance
Checking + savings	$180,000
Brokerage account	$420,000
401(k)	$300,000
IRA	$100,000
Total eligible assets	$1,000,000

$1,000,000 ÷ 60 months = $16,667 in monthly qualifying income

That figure becomes the income underwriting uses to evaluate your file, in place of a pay stub, 1099, or bank statement deposit average. No employment is required to qualify — the assets themselves carry the file.

Credit, LTV, and Program Limits

The minimum credit score for asset-based qualification is 660. This program is limited to primary residences only — it isn't available for second homes or investment properties. Loan-to-value tops out at 80% up to a $3,000,000 loan amount for a purchase or rate-and-term scenario. If you're looking to pull cash out, LTV is capped at 75% up to the same $3,000,000 loan amount.

Who This Program Tends to Fit

We see asset-based qualification work well for:

1. Retirees or near-retirees who have substantial retirement and investment balances but limited or no current employment income.
2. Business owners between ventures — someone who recently sold a company and hasn't started a new income stream yet, but has significant liquid assets from the sale.
3. High-net-worth investors whose wealth sits primarily in a portfolio rather than a paycheck.
4. Anyone with inherited assets who wants to purchase a primary residence without waiting to establish a new income history.

Consider a business owner who sold a company for several million dollars and is deciding what to do next — consult, start a new venture, or step back for a while. That owner may have little or no current employment income to document, but a substantial, easily verified asset base sitting in checking, brokerage, and retirement accounts. A bank statement loan wouldn't apply because there's no ongoing business generating deposits, and a 1099 or W-2 program wouldn't apply because there's no current income at all. Asset-based qualification is built for exactly this gap — it lets the balance sheet itself stand in as the qualifying factor while the owner figures out the next chapter.

If your assets don't quite cover what you need, or if you also have some ongoing 1099 or bank-statement income, it's worth discussing a blended approach with your loan officer — in some cases we can combine documentation types to strengthen a file. And if you do have consistent business deposits, our bank statement loans program might qualify you for a higher amount than the assets-only calculation would on its own.

What Counts (and What Doesn't)

Eligible assets include checking and savings account balances, stocks, bonds, and retirement accounts like 401(k)s and IRAs. A few practical notes:

• Assets need to be sourced and seasoned — underwriting will want to see where large recent deposits came from.
• Retirement account balances are typically counted, though there can be adjustments depending on account type and access rules; your loan officer will walk through exactly how your specific accounts are treated.
• This program calculates income from assets — it doesn't require you to liquidate anything to qualify.

Step-by-Step: How the Process Works

1. Gather statements for every account you want counted — checking, savings, brokerage, 401(k), and IRA.
2. We total the eligible balances and apply the 60-month divisor to calculate your qualifying monthly income.
3. We check that number against the loan amount you're targeting, along with the 80% (purchase) or 75% (cash-out) LTV limits up to $3,000,000.
4. Underwriting verifies and sources the assets, confirming balances and the origin of any large or recent deposits.
5. We finalize your file for your primary residence purchase, rate-and-term refinance, or cash-out refinance.

Comparing Asset-Based to Other Documentation Paths

Program	What It Measures	Employment Required?	Property Types
Asset-based	Assets ÷ 60 months	No	Primary residence only
Bank statement	Average monthly deposits	Yes (self-employed)	Primary, second home, investment
1099 income	1099 forms	Yes (1099 work)	Primary, second home, investment

If you have both meaningful assets and ongoing self-employed income, it's worth exploring which single program — or which combination — gets you to the strongest qualifying number. That's exactly the kind of comparison we walk through when you take our quiz.

Frequently Asked Questions

Do I need any employment or income documentation at all? No employment documentation is required for this program — qualifying income is calculated entirely from the eligible assets you're using, divided by 60 months.

Can I use this program for a second home or investment property? No. Asset-based qualification is currently limited to primary residences only.

What credit score do I need? 660 is the minimum FICO score required for this program.

Can retirement accounts really count toward my qualifying income? Yes, checking, savings, stocks, bonds, 401(k), and IRA balances are all eligible asset types, though your loan officer will walk through how your specific account types and any access rules factor into the calculation.

Let's Look at Your Balance Sheet

If your income doesn't tell the full story but your assets do, an asset-based mortgage might be the most direct path to a primary residence purchase or refinance. Take our quiz to get matched with the right program, or reach out directly. Zac Cook at 480-406-2016 or Tanner Cook at 480-420-4918 on the Cook Brothers team at Cornerstone First Mortgage can run the 60-month calculation against your specific accounts and show you where you land.

Zac Cook is a licensed mortgage loan originator (NMLS #2111496) with Cornerstone First Mortgage, LLC (NMLS #173855). This article is educational and is not a commitment to lend or financial advice. Non-QM loan programs require alternative income documentation; all loans are subject to underwriting approval, income and asset verification, and an ability-to-repay determination. Not all applicants will qualify. Programs and guidelines are subject to change without notice. Equal Housing Opportunity Lender.