PATRICK'S QUICK ANSWER
An asset depletion loan converts your savings, investments and retirement accounts into qualifying monthly income, which is how a retiree with no paycheck still buys a home. We divide qualifying assets by the loan term in months, so $200,000 over 360 months adds about $555 a month to your income picture. It is built for asset-rich, income-light buyers. Ask Patrick whether an asset depletion loan fits your situation.
You have plenty of money in the bank but no paycheck to show for it, and every lender you call says no. That is exactly the buyer an asset depletion loan is built for: you convert what you own into qualifying income, and a retiree with no job history still gets approved.
Asset depletion loans use your liquid assets such as savings, investments, and retirement accounts to calculate qualifying monthly income. Your assets are divided by the loan term in months.
For example, $500,000 in savings divided by 360 months equals $1,389 per month of qualifying income. This is added to any other income you have.
This loan type is ideal for retirees, early retirees, or high-net-worth borrowers who have significant assets but limited monthly income.
What is an asset depletion loan?
Asset depletion loans use your liquid assets such as savings, investments, and retirement accounts to calculate qualifying monthly income. Your assets are divided by the loan term in months, and that monthly figure is added to any other income you have.
Think of it as turning your net worth into a paycheck. The lender does not see a monthly salary, so it counts the money you already own as if it were spread across the life of the loan. That is the whole trick, and it opens the door for buyers a traditional file would turn away.
How the calculation works
Lenders take your total eligible assets and divide by 180 or 360 months, depending on your age, to create monthly qualifying income. This income is added to your other income sources for qualification purposes.
Example: $100K in an IRA plus $100K in savings equals $200K total. $200K divided by 360 months adds about $556 a month of qualifying income, on top of any Social Security or pension income. The longer the term you divide by, the smaller the monthly income, so the lender's term choice shapes how much house you can qualify for.
What counts as an asset
Eligible assets include cash and savings, stocks and bonds, mutual funds, retirement accounts such as a 401(k) or IRA, and sometimes real estate equity with restrictions. Ineligible assets include business assets and hard assets like cars.
The meaning is simple: lenders count money they can verify and that you can realistically liquidate. A retirement account counts, but at a value the lender can document. A car does not, because it is not the kind of asset that pays the mortgage.
Who qualifies
This loan is ideal for retirees with significant retirement savings but limited monthly income, early retirees before Social Security kicks in, wealthy individuals with irregular income, and those transitioning between careers.
The real-world consequence: if you are asset-rich and income-light, this is the loan designed for you. Bring your account statements and let me run the asset depletion calculation before you assume the numbers will not work.
Rates, terms, and documentation
Rates are similar to conventional loans. A down payment of 20% or more is typical. Documentation includes account statements for all listed assets, and no tax returns are needed for the asset depletion calculation.
The money consequence: the larger down payment is the price of entry, but the payoff is that your assets, not your paycheck, carry the qualification. Clean, complete account statements are the key to a smooth file.
Alternatives to consider first
Before using asset depletion, consider simpler options: conventional loans if you have other income, bank statement loans, or simply using assets for a larger down payment to reduce the loan amount.
The play is to compare, not to settle. Asset depletion is a powerful tool, but it is not always the cheapest one. Run it side by side with the alternatives, pick the loan that fits your cash and your goals, and make it a great one, Patriot Nation.
Ask Patrick about asset depletion loans
Find out whether your assets can help you qualify and how lenders calculate the income.
