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Can You Qualify for a Mortgage Without Income?
Asset utilization can allow borrowers with substantial savings or investments to qualify for a mortgage even without a traditional monthly income stream. Here's how lenders can turn eligible assets into qualifying income—and why this option can be especially useful for retirees.
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Read the transcript
One of the least understood ways to qualify for a mortgage is this: <b>you may not need an income stream at all.</b>
After the 2008 financial crisis, mortgage rules put much more emphasis on proving a borrower’s ability to repay. Somewhere along the way, that turned into a misconception that you need a steady job — or at least regular monthly income — to qualify.
But assets can sometimes demonstrate that ability to repay, too.
Let’s say you’re retired and have a large 401(k), but you’re not taking monthly distributions from it. With an asset utilization loan, we can apply a formula to that account balance and turn it into what I like to call an <b>“implied income stream”</b> for qualifying purposes.
And you’re not pledging the account to the lender. The money stays yours to manage as you please.
Versions of this strategy are available with conventional financing as well as non-QM loans, and the formulas can be very different. So if you have substantial assets but not much traditional income, don’t assume you can’t qualify.
And remember — it’s always okay to ask. We’re here to help you get home.