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Asset Depletion Guidelines For Borrowers Without Income

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This BLOG On Asset Depletion Guidelines For Borrowers Without Income Was PUBLISHED On February 20th, 2019

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. Good news is that alternative financing is coming back.

Gustan Cho Associates at Loan Cabin Inc. now offers the following:

Asset Depletion Guidelines And Requirements

Every lender has different Asset Depletion Guidelines.

  • Gustan Cho Associates at Loan Cabin 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 Does Asset Depletion Guidelines On Income Work

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 At Loan Cabin 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:

  • Borrower had no job but $200,000 in cash and $700,000 in an IRA Account
  • 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 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

Please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We have multiple asset depletion loan programs. As long as you have assets, we will match you with a perfect asset depletion loan program for you.

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