why our team loves Asset Depletion loans
Wealth doesn't always look like a paycheck. Asset Depletion loans give retirees, self-employed professionals, and investors a way to qualify based on real financial strength, not just tax returns or pay stubs.
Asset Depletion Loans At A Glance
The Asset Depletion Loan is a non-QM mortgage that determines your qualifying income based on your liquid assets. Instead of traditional income verification, lenders divide your assets over a set term (often 120 or 360 months) to calculate monthly income.
Highlights
- Uses Assets Instead of Income: Qualify using cash, investment accounts, or retirement funds — not employment income.
- No Employment Required: Great for retirees, high-net-worth individuals, or those between jobs.
- Can Be Primary or Secondary Home: Often available for second homes or investment properties, depending on lender.
- No Tax Returns Needed: Avoid complex income documentation when your assets speak for themselves.
- Non-QM Portfolio Loan: Not tied to traditional underwriting guidelines — offers more flexibility for qualified borrowers.
Asset Depletion Loan Guidelines
- Eligible Borrowers: High-asset individuals with limited or irregular income streams.
- Loan Type: Non-QM or portfolio loan; not eligible for FHA, VA, or USDA.
- Income Calculation: Total qualifying assets divided by 120 or 360 months (based on occupancy and loan purpose).
- Occupancy Types: Primary, second home, and some investment properties (varies).
- Down Payment: Typically 20% or more.
- Documentation: Asset statements (usually 60–90 days), identification, property documentation.
- Loan Limits: Varies, but often above conforming limits.
Pros of Asset Depletion Loans
- No Traditional Income Needed: Use your assets to qualify, even without employment or a steady paycheck.
- Ideal for High-Net-Worth Clients: Perfect for borrowers with strong reserves but limited reportable income.
- Works for Primary, Second, or Investment Homes: Many lenders allow flexible occupancy types.
- No PMI: Most asset depletion loans don’t require private mortgage insurance, even with less than 20% equity.
- Streamlined For Self-Employed And Retired Borrowers: Designed with non-traditional earners in mind.
Best Candidates
Retirees with substantial savings or investment income
Self-employed individuals with low taxable income but strong liquid assets
Borrowers between jobs or transitioning careers who want to leverage their net worth
Buyers interested in a second home or investment property with non-traditional income documentation
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