Retired with Assets but No W-2: How a Pierce County Retiree Qualified for a Mortgage Using Asset Depletion

Asset depletion is a qualification method that lets you use your liquid assets investment accounts, retirement accounts, savings as income for mortgage purposes. The lender takes your total eligible assets, divides them by a set number of months (typically 360 for a 30-year loan), and treats that monthly figure as qualifying income.

Robert had about $1.2 million in eligible assets: a brokerage account, an IRA, and a 401(k) he'd rolled over. Divided by 360 months, that's about $3,333 per month in 'asset depletion income' on top of his actual dividend and Social Security income.

With his combined qualifying income dividends, Social Security, and asset depletion Robert qualified for a $420,000 loan on a $525,000 home in Lakewood. He put 20% down ($105,000) from his investment accounts and financed the rest.

Not all assets qualify for asset depletion. Eligible assets typically include: stocks, bonds, mutual funds, retirement accounts (401k, IRA, SEP), certificates of deposit, and savings accounts. The lender typically uses the current value minus any penalties for early withdrawal from retirement accounts.

What usually doesn't count: the equity in other real estate, business equity that isn't liquid, and assets you're already using as collateral on other loans. The lender wants assets that could realistically be drawn down to make mortgage payments.

Robert's $1.2 million was all in liquid, eligible accounts. If he'd had $600,000 in home equity and $600,000 in investments, only the investment portion would have counted which is why it's important to understand what's eligible before you apply.

Asset depletion isn't free money you're not spending down your assets to make payments. It's a qualification method that lets the lender see your assets as a source of repayment capacity. You still make your mortgage payment from your actual monthly income (dividends, Social Security, pension, etc.).

The trade-off: not all lenders offer asset depletion qualification, and the ones that do may have different rules about which assets count, how they're valued, and how many months they divide by. Working with a broker who has access to multiple lenders matters I can shop your profile to the lenders whose asset depletion programs fit your situation best.

Robert's monthly payment including taxes and insurance was about $2,890 well within his actual monthly income from dividends and Social Security. The asset depletion qualification simply gave the lender confidence that he had the resources to repay the loan.

Asset depletion is ideal for retirees and near-retirees who have substantial assets but limited traditional income. If you're living off investments, pensions, or retirement accounts and you've been told you don't have enough 'income' to qualify, this may be the path that works.

It's also useful for self-employed borrowers with significant liquid assets whose business income is hard to document traditionally. The right program depends on your asset mix, your age, your loan amount, and the property you're buying.

If you're retired or retiring and wondering whether you can qualify for a mortgage, let's look at your full financial picture. I'll help you understand what programs you may qualify for and how to present your assets in the way that works best for your situation.

All loan products, interest rates, and terms are subject to credit approval and market conditions. This is not a commitment to lend. Asset depletion qualification rules vary by lender and loan program. Programs, rates, terms, and conditions are subject to change without notice.