Asset Depletion Mortgages in New Jersey

Are there tax consequences to using retirement funds this way?

Qualifying with retirement assets does not by itself trigger a withdrawal or a tax event, because the calculation is on paper. If you later withdraw funds to make payments, taxes and penalties may apply depending on the account and your age. How that affects you is a personal question, so talk to a tax professional before relying on retirement funds.

Which assets count for an asset based mortgage?

Cash accounts usually count in full. Stocks, bonds and mutual funds are commonly counted at a reduced value, and retirement accounts may be counted after allowing for taxes or penalties if you can access them. Assets that are pledged, illiquid or hard to value, such as business equity or real estate, are generally excluded. Each program sets its own list.

Do I have to withdraw money every month?

No. The calculation measures your capacity to pay from assets; it does not require you to draw down your accounts on a schedule. You can pay the mortgage from any source, including investment returns, a pension or Social Security. The lender simply wants confidence that your assets are large enough to support the payment over time.