Asset Depletion Guidelines For Borrowers Without Income
This Article Is About Asset Depletion Guidelines For Borrowers Without Income
Non-traditional mortgages came to an abrupt halt after the 2008 mortgage meltdown. Popular loan programs such as stated income, no doc, bank statement loans, and asset depletion loans came to an abrupt halt. The good news is that alternative financing is coming back
Gustan Cho Associates now offers the following:
- Non-QM Loans with no waiting period after bankruptcy and/or foreclosure
- Bank statement loans for self-employed borrowers where no income tax returns are required
- Non-QM Jumbo Loans with credit scores down to 500 FICO
- 95% Loan-To-Value NON-QM Jumbo Mortgages
- 90% Loan-To-Value NON-QM Jumbo Mortgages With Low Credit Scores
- Asset Depletion Loan Programs with no income requirements
Asset Depletion Eligibility Requirements
Every lender has different Asset Depletion Guidelines.
- Gustan Cho Associates has multiple asset depletion investors
- We have lenient Asset Depletion Guidelines
- Our Asset Depletion Guidelines is not set in stone
- We can make exceptions if borrowers may not meet one or two Asset Depletion Guidelines
Many of these alternative loan programs that were discontinued right after the 2008 mortgage and credit collapse is now coming back.
Benefits Of Asset Depletion Mortgages
Many home buyers, especially retirees, have limited or no traditional income.
- However, they have assets
- Some people have well over in the high six figures in assets
- Borrowers with a lot of assets but little to no traditional income can now qualify for home mortgages with our Asset Depletion mortgage program
- This unique home loan program allows borrowers with substantial assets and low to no income to qualify for home loans
- Borrowers who benefit from asset depletion loans are business owners who declare low income or losses on their income tax returns but has substantial assets
- Also, borrowers who are retired with substantial assets in their retirement and/or stock/securities investment accounts
- Until now, only borrowers with qualified income and employment history were the ones that could only qualify for home mortgages
Now, borrowers with substantial assets with no income can qualify for mortgages with asset depletion loans.
How Do Lenders Calculate Income On Asset Depletion Mortgages
Dale Elenteny is our Asset Depletion Mortgage Expert and a Senior Vice President at Gustan Cho Associates at Loan Cabin Inc.
Here is how Dale Elenteny summarizes Asset Depletion Income Calculation:
Asset depletion is a calculation where a borrower’s liquid assets are entered into a calculation to bring up the amount of monthly income they have in order to make mortgage payments. Generally the calculation is a borrowers total assets divided by a set number of months, such as 360 for the standard 30 year loan. Qualifying assets tend to be only liquid assets such as cash, investment accounts and retirement accounts. 100% of the assets in cash accounts and non retirement liquid investment accounts typically qualify. For retirement accounts the amount that qualifies is generally about 70% of the asset base and could potentially be close to 100% if the borrower is over 591/2 years old. Each lender has different asset depletion guidelines but the concept is the same. Check with your lender to see what they are willing to use in their calculation.
How Gustan Cho Associates Calculates Income On Asset Depletion
As mentioned earlier, Gustan Cho Associates at Loan Cabin has various asset depletion guidelines.
Let’s take an example of one of Dale Elenteny’s borrowers who qualified for a particular asset depletion loan program:
- The borrower had no job but $200,000 in cash and $700,000 in an IRA Account
- The borrower is buying a $250,000 home in Illinois
- We have a program that will take the sum of all liquid assets and we divide the sum by 60 months
- The yielding figure is the qualified monthly income
- On this case, add the $200,000 and $700,000 together
- The sum is $900,000
- Then divide the $900,000 by 60 months
- This figure yields $15,000
- The borrowers qualifying income is $15,000 per month
- Now the down payment required on this particular asset depletion program is 15% down payment on a home purchase
- So the loan amount is $212,500
- Our investor requires the borrower to have at least 110% of the loan amount, or $233,750 in assets
- This borrower has $900,000 which is more assets than the minimum required
This borrower has a loan approval and is scheduled to close in the coming days.
Qualifying For Asset-Depletion Loan Program
Borrowers who do not have a regular source of income but have assets can now qualify for an asset depletion mortgage. The asset depletion loan program is ideal for wealthy borrowers who have substantial assets but do not have a regular traditional income source. Many retirees and business owners are ideal borrowers who can benefit from the asset depletion loan program. Please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at [email protected] Gustan Cho Associates has multiple asset depletion loan programs. As long as you have assets, we will match you with a perfect asset depletion loan program for you. Our asset depletion mortgage loan programs are for primary owner-occupant homes, second homes, and investment properties.