Tools
Asset Allowance Income Calculator
Estimate how eligible personal assets may potentially supplement monthly qualifying income for mortgage debt-to-income analysis — and see what that does to the ratio.
Quick Answer
An asset allowance converts eligible assets into an estimated monthly income figure, usually by dividing net available assets across a 60-month continuance period, and adds it to other qualifying income for debt-to-income analysis. Funds needed for down payment, closing costs, and reserves are deducted first, since the same dollars cannot serve two purposes. Continuance periods, eligible asset categories, and haircuts vary by program and are subject to lender review.
Qualified assets
Estimate placeholder (100%)
Estimate placeholder (100%)
Estimate placeholder (70%)
Estimate placeholder (80%)
Assets not available for the allowance
See the potential DTI impact
Estimated monthly asset allowance
$28,733
Net assets available divided over a 60-month continuance period. An estimate for planning, not qualifying income.
How the allowance is built
- Total assets entered
- $2,600,000
- Estimated qualified asset value
- $2,330,000
- Less: transaction funds & exclusionsDown payment, closing costs, prepaids, reserves, and other unavailable assets
- -$606,000
- Net assets available for allowance
- $1,724,000
- Continuance period
- 60 months
- Estimated monthly asset allowance
- $28,733.33
- Estimated annualized asset allowance
- $344,800
Monthly allowance
$28,733
Annualized allowance
$344,800
Important: This calculator provides an estimate for educational and planning purposes only. Results are not a loan approval, underwriting decision, commitment to lend, or guarantee of qualifying income or eligibility. Actual income calculations, asset eligibility, expense factors, continuance requirements, documentation standards, and program guidelines vary by lender and loan program and are subject to further review and verification.
Asset eligibility percentages displayed by this calculator are estimate placeholders for the modeled scenario. Actual eligible percentages and asset treatment may differ based on the specific program, borrower, account type, accessibility, age, documentation, and current lender guidelines.
Want to Know Whether an Asset Allowance Strategy Fits?
How much of an asset base can supplement income — and whether it needs to — depends on the program, the transaction, and what else is on the application. Send Jonathan the scenario you just modeled.
Prefer to talk? Call Jonathan at 210-993-5023
Assumptions used
- A 60-month continuance period is used for the modeled program. Other programs use different periods, which changes the allowance proportionally.
- Each category is multiplied by the eligibility percentage shown, which you can change to match the program you are modeling.
- Business funds and funds jointly held with a non-borrower are excluded from the modeled eligible total.
- Assets needed for the down payment, closing costs, prepaids, and reserves are deducted because the same dollars cannot be used twice.
- If deductions exceed eligible assets, the available balance floors at $0 rather than producing negative income.
- Pre-filled values are examples for demonstration only.
Results are estimates for educational purposes only and are based on the information and assumptions entered. They are not a loan approval, commitment to lend, or rate quote. Actual loan terms, payments, eligibility, taxes, insurance, and other costs may differ.
This tool does not determine eligibility, approval, or qualification, and the allowance shown is not qualifying income. Asset treatment and continuance requirements vary by lender and program.
Cascada Mortgage Advisors, Inc. DBA HomeFlow (NMLS #2470941, CA DRE #02206556) is a licensed mortgage broker, not a direct lender. Any interest rate you enter is your own assumption, not a HomeFlow rate.
An allowance is not an asset-only program
Unlike an asset-only program, an asset allowance strategy converts eligible assets into an estimated monthly income allowance that may be added to other qualifying income, subject to applicable program requirements. That distinction changes the entire analysis: the allowance is measured inside a debt-to-income calculation alongside everything else on the application.
- Eligible balances are reduced by the applicable eligibility percentage before anything else.
- Funds needed for down payment, closing costs, prepaids, and reserves come out first.
- The remainder is divided over a 60-month continuance period in the modeled program.
- Business funds and funds held jointly with a non-borrower are excluded from the modeled total.
The same dollars cannot be used twice
The most common error in an asset strategy is counting the down payment twice — once as the cash to close and again as income continuance. This tool deducts transaction funds before computing the allowance, and floors the available balance at zero rather than producing a negative result when deductions exceed eligible assets.