The Assumption: Paying Cash Is Always the Smart Move
She was ready to make her move south permanent — closer to her daughter and grandchild. With substantial retirement savings, her initial plan was simple: pay cash for the home and avoid a mortgage altogether.
But both her CPA and wealth advisor advised against it.
Their reasoning was clear. Keeping her assets invested would allow her money to continue working for her in the market, rather than tying it up in a single illiquid asset. In addition, carrying a mortgage could provide tax advantages, helping reduce the effective cost of borrowing and allowing her to keep more money in her pocket.
The Challenge: Qualifying Without Traditional Income
While the strategy made sense financially, there was a problem. As a retiree, she didn’t have sufficient traditional income to qualify for the mortgage payment her advisors recommended.
This is a common issue for retirees: significant assets, but not enough qualifying income under standard lending guidelines. Paying cash would have been easy — but it would have undermined the broader financial strategy her advisory team supported.
The Strategy: Using Assets to Qualify for a Mortgage
Instead of defaulting to an all-cash purchase, we used a hybrid of retirement income with a calculation of asset depletion over time to boost her qualifying income.
By evaluating her retirement assets and applying a structured depletion methodology over a defined period, we were able to estimate a reliable monthly income stream from her portfolio. This calculated income was then used for qualifying purposes, alongside her existing retirement income.
This approach allowed her to qualify for the mortgage — without liquidating assets or disrupting her long-term investment strategy.
The Outcome: Buying the Home While Preserving Wealth
With the mortgage in place, she was able to make the move closer to family while keeping her money invested and working for her. Rather than locking her wealth into a single property, she maintained flexibility, liquidity, and long-term growth potential.
She also gained the benefit of mortgage interest tax deductions, helping offset the true cost of financing and reinforcing the advice her CPA and wealth advisor had given from the start.
Mortgages aren’t just for people who can’t pay cash.
When used strategically, an asset-based mortgage can be a powerful financial tool — allowing retirees to preserve assets, improve tax efficiency, and keep wealth working elsewhere. In the right scenario, it’s not a liability — it’s leverage.
Have questions about an asset-based loan?
We can walk you through how asset depletion works and whether it fits your situation.
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