Asset-Based Mortgages in California

An asset-based (or 'asset depletion') mortgage qualifies California borrowers using their liquid assets instead of employment income. The lender treats your total qualifying assets divided by 60-84 months as if it were monthly income, then qualifies you against standard DTI ratios. This is the leading mortgage option for retirees, financially independent buyers, and high-net-worth individuals who don't draw a traditional paycheck.

Minimum qualifying assets vary by loan amount. As a rule of thumb, you need liquid assets equal to 1.5x – 2x the loan amount you want, AFTER setting aside down payment and 12 months of reserves. Example: $1M loan amount typically requires $1.5M – $2M in remaining liquid assets after subtracting $250K down payment + ~$120K in reserves. Save Financial calculates exact requirements based on your specific accounts.

Checking, savings, money market, taxable brokerage accounts, CDs, and certain retirement accounts all count — though retirement accounts (IRA, 401(k)) are typically discounted 30% – 40% if the borrower is under age 59½ to account for early-withdrawal penalties. Investment real estate equity, restricted stock, and crypto are NOT eligible. 100% of liquid assets count for borrowers 62+ since retirement funds are accessible without penalty.

Most asset-based programs are restricted to primary residences and second homes. For investment properties, the better option is usually a DSCR loan, which qualifies on the property's rental income rather than your assets. Save Financial offers both and will recommend whichever produces the better outcome for your situation.

Yes — typically 0.75% – 1.50% higher than conventional, because they fall outside the Qualified Mortgage (QM) rules. At today's market levels, expect 7.5% – 8.25% on a well-qualified asset-based loan vs. 6.5% – 7.0% on conventional. The convenience of qualifying without employment income makes the rate premium worthwhile for many high-net-worth borrowers.

Yes. Asset documentation is rigorous: 2-3 months of statements for every qualifying account, large-deposit explanations, and source-of-funds documentation for any recent transfers. The point of an asset-based loan isn't to reduce documentation overall — it's to substitute asset documentation for income documentation, which is much simpler for borrowers without employment income.

Yes. Many of our asset-based borrowers are working professionals who simply don't want to provide tax returns (privacy, complex K-1 returns, recent transitions). Save Financial does not require employment to be verified on an asset-based loan — the asset depletion calculation alone determines qualification. Some borrowers blend small income with assets for stronger qualifying numbers.

Marketable securities (stocks, bonds, mutual funds, ETFs) are typically counted at 70% – 80% of current market value to account for liquidation timing and tax impact. Cash and money market are counted at 100%. Retirement accounts are discounted 30-40% if borrower is under 59½, counted at 100% over 62. Save Financial computes the highest qualifying number across all asset categories.