Asset Depletion / Asset-Based Loans
An Asset Depletion / Asset-Based Loan allows borrowers to qualify for a mortgage based on their liquid assets rather than traditional income. This program is ideal for retirees, investors, or high-net-worth individuals who may not show enough taxable income but hold significant assets.
What Is an Asset Depletion Loan?
Instead of using employment income or tax returns, lenders calculate monthly “qualifying income” by dividing a borrower’s assets over a set term (commonly 120 or 360 months). This method helps borrowers with strong savings or investments qualify for mortgages, including luxury homes and jumbo properties.
How It Works
- Loan Amounts: $250K – $5M+ depending on lender.
- Down Payment: Typically 20%–30%.
- Credit Score Requirement: 680–700+ (varies by lender).
- Eligible Assets: Checking/savings, money market accounts, CDs, stocks, bonds, vested retirement funds.
- Income Calculation: Example: $1,200,000 in assets ÷ 120 months = $10,000 monthly qualifying income.
- Property Types: Primary, second homes, and sometimes investment properties.
- Reserves: 6–12 months of reserves may be required.
Benefits of the Standard 97% LTV Loan
- Qualify without traditional income or employment.
- Perfect for retirees, investors, or self-employed individuals.
- Large loan amounts available for luxury purchases.
- Assets remain intact (no liquidation required).
- Flexible documentation options.
Fun Facts & Insider Details
- Retiree-Friendly: Popular among retirees living off investments instead of paychecks.
- Different Formulas: Some lenders use 120 months, others 360 — shorter terms make income look higher.
- Discounting Assets: Retirement funds are often discounted (e.g., 70% of account value).
- Portfolio Product: Many lenders keep these loans in-house, so guidelines vary widely.
Who Is the Best Candidate for Asset Depletion / Asset-Based Loans?
- Retirees with substantial savings but limited income.
- Borrowers with significant investments or liquid assets.
- High-net-worth individuals purchasing luxury real estate.
- Buyers with irregular or complex income streams.
FAQs
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Do I have to liquidate my assets?
No. Assets are only used to calculate income, not withdrawn.
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Can I use retirement accounts?
Yes, vested retirement funds may be used, often discounted by the lender.
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Can I use business assets?
Asset Depletion / Asset-Based Loans
Some lenders allow this with documentation showing full borrower access.
Next Step
- Llámenos: 305-440-1507
- Correo electrónico: info@torresnc.com
⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.
