Assets vs Income

Mortgage 101
Differentiating between your assets and your income is a critical step in building wealth.
Published on
July 16, 2024
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You've worked hard to build up your assets and income, but what do lenders see when they look at you?

Incomes vs Assets

The best way to think about assets and income is that:

  • Your assets are the things you own, while your income is what you've earned from those assets.
  • When people say they have "assets," they're talking about their car or house or savings account—things that can be used to make money in some way, shape, or form.
  • And when people say they have an "income," they're referring to the amount of money left over after paying for rent/mortgage and bills (aka expenses).
What the lender sees when they look at your assets.

When a lender is reviewing your application for a home loan, they're going to look at all of the assets that you have. Your assets are things like savings and investments, as well as vehicles and real estate.

The lender will consider your assets when determining if you qualify for a home loan and how much money you can borrow. If you don't have enough money saved up for a down payment on your new home or if there aren't any other financial resources available to help offset closing costs, then the lender may deny your application.

It's important to keep in mind that not all of your assets are eligible for use when buying a house. For example, retirement funds are often only accessible through retirement accounts such as an IRA or 401(k).

What the lender sees when they look at your income

When lenders look at your income, they want to see that you have some reasonable consistency over time. They understand that sometimes life will throw unexpected curveballs and you may not be able to pay your bills on time occasionally. However, if this is a regular occurrence for you, then it will be difficult for them to agree to lend you money.

How long does it take for the lender company or bank manager to decide whether or not they will lend us money?

The answer is that it depends on how much money we are asking them for! Generally speaking though, most mortgage applications can be processed in less than seven days when all necessary documentation has been supplied by the applicant (i.e., proof of identification and employment details).


In conclusion, we hope this article has helped you understand the difference between income and assets. It is important to know how lenders view both so that you can make the right decisions when applying for a loan or mortgage.

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