I'm 64 and Retired With $3.2M in Investments But No W-2 Income: How Asset-Based Mortgages Gave Me Homeownership

I retired from corporate finance in 2022 at age 62. After 35 years of diligent saving and investing, my wife and I had accumulated $3.2 million in retirement accounts, brokerage accounts, and other liquid assets.

When we decided to relocate from Boston to Naples, Florida in early 2024, we found the perfect $1.15 million home near the beach.

The problem: I haven’t had W-2 income since 2022. My “income” consists entirely of:

• Investment dividends and interest
• Required minimum distributions (RMDs) starting at age 73
• Social Security (about $3,400/month combined)
• Occasional consulting (1099 income, irregular)

Total verifiable monthly income on traditional mortgage application: About $6,800

Monthly payment on $1.15M home with 20% down: About $7,200

Debt-to-income ratio: 106% (I didn’t qualify)

Every conventional lender rejected me because my “income” didn’t support the mortgage payment—despite having $3.2 million in liquid assets.

Then I discovered asset-based mortgages.

Here’s exactly how I qualified for a $950,000 mortgage without traditional income verification—using my investment portfolio to demonstrate repayment ability.

Understanding Asset-Based Mortgages (Asset Depletion Loans)

What Are Asset-Based Mortgages?

Asset-based mortgages (also called asset depletion or portfolio loans) allow borrowers to qualify based on liquid assets rather than employment income.

Instead of W-2s or tax returns, lenders evaluate:

• Investment accounts (stocks, bonds, mutual funds)
• Retirement accounts (401k, IRA, Roth IRA—typically 70% eligible)
• Savings and money market accounts
• Certificate of deposit (CD) accounts
• Real estate equity (sometimes, as secondary support)

How lenders calculate “asset income”:

Lenders divide your liquid assets by a specific number of months (usually 60-120 months) to determine a hypothetical monthly income stream.

Example calculation:

• Total eligible assets: $3,000,000
• Lender’s depletion period: 84 months (7 years)
• Calculated monthly income: $3,000,000 ÷ 84 = $35,714/month

This $35,714/month becomes your “qualifying income” for debt-to-income ratio calculation.

Who Benefits From Asset-Based Mortgages?

Ideal candidates:

• Retirees with substantial assets but limited monthly income
• Early retirees (under 59.5) who can’t access retirement accounts without penalty
• High-net-worth individuals with wealth in investments rather than salary
• Trust fund recipients with assets but no employment
• Business owners who reinvest profits instead of taking high salary
• Recently retired executives transitioning from W-2 to asset-based income

Not ideal for:

• Borrowers with under $500,000 liquid assets (usually minimum)
• Those without 20-30% down payment
• Borrowers with low credit scores (under 680)
• Anyone who can qualify conventionally (conventional rates are better)

My Asset-Based Mortgage Application

My Financial Profile

Age: 64 (retired since 2022)

Liquid assets:

• 401k rollover to IRA: $1,850,000
• Brokerage account (stocks/bonds): $980,000
• Savings and money market: $220,000
• Roth IRA: $150,000
• Total liquid assets: $3,200,000

Monthly “income”:

• Social Security: $3,400/month combined
• Investment dividends/interest: $2,800/month (varies quarterly)
• Occasional consulting (1099): $600/month average (irregular)
• Total monthly income: $6,800

Monthly debts:

• None (paid off house, cars, credit cards before retiring)

Credit score: 782

Home I wanted:

• Purchase price: $1,150,000 (Naples, FL)
• Down payment: 20% ($230,000)
• Loan amount needed: $920,000

Asset-Based Loan Qualification Calculation

Step 1: Determine eligible assets

Not all assets count equally. My lender used these percentages:

• IRA/401k accounts: 70% eligible ($1,850,000 × 70% = $1,295,000)
• Brokerage accounts: 100% eligible ($980,000 × 100% = $980,000)
• Savings/money market: 100% eligible ($220,000 × 100% = $220,000)
• Roth IRA: 70% eligible ($150,000 × 70% = $105,000)

Total eligible assets: $2,600,000

Why only 70% on retirement accounts?

Lenders discount retirement accounts to account for:

• Early withdrawal penalties (if under 59.5)
• Taxes owed on distributions
• Market volatility reducing account values

I’m over 59.5 so no penalty applies, but lender still applied 70% haircut for tax liability.

Step 2: Calculate asset depletion income

My lender’s depletion period: 84 months (7 years)

Calculated monthly income: $2,600,000 ÷ 84 months = $30,952/month

This became my “qualifying income” for the mortgage application.

Step 3: Calculate debt-to-income ratio

Monthly qualifying income: $30,952

Maximum DTI allowed: 43% (same as conventional loans)

Maximum monthly obligation: $30,952 × 43% = $13,309

My monthly debts: $0 (no debts)

Maximum housing payment allowed: $13,309

What $13,309/month supports:

At 7.25% interest rate (asset-based loan rate), $13,309/month breaks down as:

• Principal & interest: $11,600 (supports $1,680,000 loan)
• Property taxes: $1,250/month (Florida property taxes about 1.3%)
• Insurance: $459/month (Florida homeowners + flood)
• Total: $13,309

I qualified for up to $1,680,000 loan based on my asset depletion income.

My actual loan need was only $920,000—so I was well within qualification limits.

Asset-Based Loan Terms

Final loan details:

• Purchase price: $1,150,000
• Down payment (20%): $230,000
• Loan amount: $920,000
• Interest rate: 7.25% (vs. 7.00% conventional at the time)
• Loan term: 30 years fixed
• Monthly P&I: $6,280
• Property taxes: $1,246/month
• Insurance: $459/month (homeowners + flood)
• Total monthly payment: $7,985

No PMI (20% down eliminates mortgage insurance)

Closing costs: $28,750 (about 2.5% of purchase price)

Total cash needed: $230,000 down + $28,750 closing = $258,750

Assets remaining after closing: $3,200,000 - $258,750 = $2,941,250

Rate and Cost Comparison

Asset-based loan rate: 7.25%

Conventional loan rate (if I qualified): 7.00%

Rate premium: 0.25%

Monthly cost difference:

• At 7.00% conventional: $6,120 P&I
• At 7.25% asset-based: $6,280 P&I
• Extra cost: $160/month = $1,920/year

Five-year extra cost: $1,920 × 5 = $9,600 (vs. conventional)

Thirty-year extra cost: $1,920 × 30 = $57,600 (vs. conventional)

Is it worth paying $57,600 extra over 30 years? For me, yes—because conventional financing wasn’t an option at all.

Why Asset-Based Mortgages Made Sense for Me

Alternative 1: Wait Until I Start RMDs (Age 73)

Required Minimum Distributions from my traditional IRA don’t start until age 73 (new rules as of 2023).

At age 64, I’d have to wait 9 more years before RMDs create “verifiable income” for conventional qualification.

Cost of waiting 9 years:

• Continue renting in Naples: $3,200/month × 108 months = $345,600
• Miss appreciation on $1.15M home: Assuming 4% annual = $480,000 equity gain over 9 years
• Total opportunity cost: $825,600

Clearly, waiting wasn’t a good option.

Alternative 2: Annuitize Part of Investment Portfolio

Some lenders accept annuitized income from immediate annuities for conventional qualification.

To create $8,000/month annuity income:

I’d need to annuitize about $1,000,000 of my portfolio (depends on age and rates).

Problems with this approach:

• Locks up $1,000,000 permanently (can’t access principal)
• Annuity income is fixed (doesn’t grow with inflation)
• I lose control and flexibility over that $1M
• Annuity fees reduce returns

I’d rather keep portfolio liquid and pay 0.25% rate premium on mortgage.

Alternative 3: All-Cash Purchase (No Mortgage)

I could’ve paid cash and avoided the mortgage entirely.

But this has downsides:

• Ties up $1,150,000 in illiquid home (reduces portfolio flexibility)
• No mortgage interest deduction
• Reduces overall investment returns (stock market historically returns 8-10% vs. 7.25% mortgage cost)
• No leverage on appreciating asset

Better strategy: Keep $1,150,000 invested (earning 8-10%) and borrow $920,000 at 7.25%—earning the spread.

Why Asset-Based Mortgage Was Best Option

Advantages:

• ✅ Qualified immediately (no waiting for RMDs)
• ✅ Kept $2.9M portfolio liquid and invested
• ✅ Maintained investment flexibility and control
• ✅ Leveraged appreciating real estate with only 20% down
• ✅ Mortgage interest deduction on taxes
• ✅ Rate was only 0.25% higher than conventional (reasonable premium)

Disadvantages:

• ❌ Paid $9,600 extra over 5 years vs. conventional (if I could’ve qualified)
• ❌ Used non-standard financing (harder to find lenders)

For me, the advantages far outweighed the small rate premium.

Asset-Based Mortgage Requirements and Process

Minimum Requirements

Assets: Most lenders require $500,000+ in eligible liquid assets (some require $1M+)

Credit score: 680-700 minimum (720+ for best rates)

Down payment: 20-30% depending on loan amount and credit

• $500K-$1M loans: 20% down
• $1M-$2M loans: 25% down
• $2M+ loans: 30% down

Reserves: 6-12 months typically (but you’ll have substantial reserves by definition if qualifying by assets)

DTI: 43-45% max using calculated asset income

Eligible asset types:

• ✅ Stocks, bonds, mutual funds in brokerage accounts
• ✅ Savings, money market, CDs
• ✅ IRA, 401k, 403b (70% eligible typically)
• ✅ Roth IRA (70% eligible)
• ❌ Annuities (usually not counted)
• ❌ Real estate equity (sometimes counted as secondary support)
• ❌ Business equity (not liquid)

Application Process

1. Find specialized lender

Not all lenders offer asset-based mortgages. I worked with a portfolio lender specializing in high-net-worth borrowers.

I found them through Browse Lenders which connects borrowers with non-QM and jumbo specialists.

2. Provide asset documentation

Required documents:

• 2-3 months recent statements for all accounts (brokerage, retirement, savings)
• Proof of ownership (account statements showing name, account numbers, balances)
• Letters from financial institutions if needed
• Documentation showing assets are liquid (not restricted stock, annuities, etc.)

3. Lender calculates asset income

Lender totaled my eligible assets ($2.6M after 70% haircut on retirement accounts) and divided by 84 months to calculate $30,952/month qualifying income.

4. Standard underwriting

From there, underwriting proceeded like normal mortgage:

• Credit check (782 score)
• DTI calculation (25% using asset income)
• Appraisal (home appraised at $1,160,000—$10K above purchase price)
• Title, insurance, inspection
• Clear to close in 32 days

Surprisingly smooth process—easier than I expected.

Current Situation and Future Plans

18 months later:

• Home value: $1,220,000 (6% appreciation)
• Loan balance: $902,400 (paid down $17,600)
• Equity: $317,600 (26%)
• Portfolio value: $3,480,000 (market gains on remaining investments)

Should I refinance to conventional?

Now that I’m 66, I have a few more years of “retirement income” documented:

• Social Security: $3,600/month (increased with COLA)
• Investment income: $3,200/month (dividends/interest—more consistent)
• RMDs starting at 73: Will add $6,000+/month in 7 years

But even with $6,800/month documented income, my DTI is:

• Monthly income: $6,800
• Monthly housing payment: $7,985
• DTI: 117% (still doesn’t qualify conventionally)

I won’t qualify for conventional refinance until age 73 when RMDs start—adding $6,000+/month to my documented income.

At that point:

• Monthly income: $12,800+ (Social Security + investment + RMDs)
• Monthly payment: $7,985
• DTI: 62% (still high, but possibly qualified with assets as compensating factors)

My plan: Hold asset-based mortgage until age 73-75, then evaluate conventional refinance once RMDs create substantial documented income. By then, rates may be lower anyway.

Alternatively: If rates drop significantly (to 5.50-6.00%), I might refinance to another asset-based mortgage at lower rate.

Who Should Consider Asset-Based Mortgages?

Ideal Candidates

✅ Retirees with $1M+ in liquid assets but limited monthly income
✅ Early retirees (under 59.5) who can’t access retirement accounts
✅ High-net-worth individuals living off investments
✅ Trust fund beneficiaries with assets but no employment
✅ Recent retirees who sold businesses and have proceeds invested
✅ Anyone who can’t qualify conventionally despite strong financial position

When to Choose Asset-Based Financing

✅ You have substantial liquid assets ($1M+)
✅ Your assets far exceed the loan amount (ideally 3-4x coverage)
✅ You have 20-30% down payment ready
✅ Your credit score is 700+
✅ You’re comfortable with 0.25-0.75% rate premium vs. conventional
✅ You want to keep assets invested rather than liquidate for cash purchase

When NOT to Use Asset-Based Mortgages

❌ You can qualify conventionally (conventional rates are better)
❌ Your assets are under $500,000 (won’t meet minimums)
❌ Your assets are mostly in illiquid form (real estate, business equity, restricted stock)
❌ You’re uncomfortable with mortgage payment exceeding conventional income
❌ Your credit score is under 680

The Bottom Line

I paid $258,750 down and borrowed $920,000 at 7.25% using asset-based mortgage—despite having no W-2 income and only $6,800/month in conventional qualifying income.

My alternative options:

• Wait 9 years for RMDs: Cost $825,600 in rent + lost appreciation
• Annuitize $1M for income: Lock up assets permanently
• Pay all cash: Tie up $1.15M in illiquid home

Asset-based mortgage was clearly the best choice.

My advice for retirees and high-net-worth borrowers:

Use Asset-Based Mortgages If:

✅ You have 3-4x loan amount in liquid assets
✅ You can’t qualify conventionally due to low documented income
✅ You want to keep investments liquid and earning returns
✅ You’re comfortable with slight rate premium (0.25-0.75%)

Try Conventional First If:

✅ Your documented income is close to qualifying (DTI under 50%)
✅ You can create additional income streams (RMDs, annuities, etc.)
✅ Waiting 1-2 years would create qualifying income
✅ You have pension or guaranteed income streams

Connect with portfolio lenders who specialize in asset-based mortgages and high-net-worth borrowers.

Check your credit score to ensure you meet 700+ minimum for asset-based programs.

For retirees with substantial assets but limited “income,” asset-based mortgages unlock homeownership without liquidating investment portfolios or waiting years for income documentation.

I’m 18 months into my Naples home, my portfolio has grown to $3.48M, and I’m paying just 0.25% rate premium for the privilege of keeping my wealth liquid and invested.

That’s a trade-off I’d make again in a heartbeat.