Asset Depletion · 7 min read
Asset-Based Lending for Individuals: How Your Savings Can Qualify You
For individuals, asset-based lending means qualifying for a mortgage on what you own instead of what you earn. Lenders call it asset depletion, asset utilization or asset qualifier loans, and they all work the same way: your liquid assets are divided over a set number of months to create a qualifying income. It’s different from the asset-based lending businesses use, which borrows against receivables and inventory.
Same idea, three names
“Asset depletion,” “asset utilization” and “asset qualifier” are mostly marketing labels for the same calculation. Some lenders reserve “asset qualifier” for a version that compares your total assets with the loan amount plus reserves rather than producing a monthly income, but the goal is the same: let substantial savings stand in for a paycheck. For how asset depletion fits under the broader asset-based umbrella, see asset depletion vs asset-based loans.
How the calculation works
- Add up eligible liquid assets: checking, savings, brokerage and retirement accounts.
- Apply haircuts where required, for example counting only part of a stock or retirement balance.
- Subtract the down payment, closing costs and required reserves.
- Divide what’s left by the program’s divisor. Non-QM programs commonly use 60 to 84 months.
Example: $1,200,000 of net eligible assets divided by 84 months is about $14,286 a month of qualifying income. Agency programs use much longer divisors; see the Fannie Mae and Freddie Mac guidelines. Try your own numbers in the asset depletion calculator.
Consumer asset-based mortgages vs business ABL
| Asset-based mortgage (individuals) | Asset-based lending (businesses) | |
|---|---|---|
| Who borrows | You, personally | A company |
| What it’s secured by | Your home | Receivables, inventory, equipment |
| How assets are used | To calculate your income | As collateral for a credit line |
| Typical use | Buying or refinancing a home | Working capital |
There’s also a third product you may hear about: a securities-based line of credit from a brokerage, which lends against your portfolio. It isn’t a mortgage, and borrowing against investments carries the risk of a margin-style call if markets fall.
Asset-based HELOCs
Some lenders apply the same asset calculation to a home equity line. If you own your home with significant equity and have savings but little income, an asset-based HELOC can give you access to that equity without selling investments. See non-QM HELOCs for the other options.
Who it fits
- Retirees with savings but modest Social Security or pension income (see mortgages for retirees)
- Business owners between ventures or after selling a company
- High-net-worth borrowers who don’t want income scrutiny
- Anyone whose wealth is in accounts rather than a paycheck
Our asset-based loan program runs from $500K to $10M, generally with about 25% down and a 680+ FICO. As an independent broker, we also check whether agency asset rules would be cheaper for your situation.
About this article: Save Financial is a California-licensed independent mortgage brokerage (NMLS #377740, DRE #01875766) in business since 2009, with offices in Newport Beach and Marina del Rey, serving all 58 counties. We have closed hundreds of non-QM loans and shop 20+ wholesale lenders to match you with the right program. This article is general education, not a loan offer or commitment to lend. For a real quote, apply online or call 949-379-5320.