What are Asset Depletion Home Loans?

Loan Types
Nontraditional Mortgages
Asset depletion is a way to make home ownership more affordable by using liquid assets to qualify. Let's breakdown the specifics!
Published on
July 16, 2024
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Introduction

Asset depletion home loans are a type of mortgage that allows you to use the value of your liquid assets, such as stocks and bonds, to qualify as income. While asset depletion loans can be used by borrowers with a traditional source of income, they're most commonly used by retirees or those who receive their income from alternative sources.

Asset depletion home loans are home loans that allow you to use the value of your liquid assets, such as stocks and bonds, to qualify as income.

An asset depletion loan is a type of mortgage where you can use the value of your liquid assets, such as stocks and bonds, to qualify as income.

It's important to note that using this loan will require a higher down payment compared to traditional mortgages. Also keep in mind that if you sell one of the assets used to qualify for the home loan before closing the deal on your home purchase then you could lose some or all of your right to use that asset in qualifying for this type of mortgage.

If you're considering buying a house with an asset depletion loan be sure to speak with an experienced lender about whether or not it makes sense for your situation before making any final decisions about which home loan program works best for you!

Borrowers with liquid assets but no verifiable income can still qualify for an asset depletion loan.

Asset depletion home loans are a type of financing that can be used for borrowers who have liquid assets but no verifiable income. In other words, these borrowers usually don't receive a W2 wage but instead have a sizeable amount of liquid assets at their disposal to use for financing purposes.

They are similar to cash-out refinance loans in that they allow you to tap into the equity in your home by taking out more than what's necessary for a purchase or renovation project, but unlike cash-out refinancing, there is no principal reduction on an asset depletion loan. Instead you'll need to prove that your income stream will continue after the loan is repaid in full; otherwise, you may find yourself upside down on another property due to interest rate resets and subsequent higher payments over time (unless your income increases).

Asset depletion loans are most commonly used by retired borrowers or those who receive their income from alternative sources.

If you’re a retired borrower or one who receives their income from alternative sources, asset depletion loans might be right for you. The following non-traditional borrowers are also good candidates:

  • Borrowers who have liquid assets but no verifiable income
  • Borrowers who have no intentions of working regular hours
  • Self-employed individuals who are having difficulty qualifying through a traditional method
Asset depletion home loans are typically used by non-traditional borrowers or retirees.

Asset depletion home loans are typically used by non-traditional borrowers or retirees.

Borrowers with liquid assets but no verifiable income can still qualify for an asset depletion loan.

Borrowers with no verifiable income can use their liquid assets as income, such as stocks and bonds that they own at the time of application, rather than relying on a verified source of income.

These types of borrowers usually don't receive a W2 wage but instead have a sizeable amount of liquid assets at their disposal to use for financing purposes.

For individuals who have an ample amount of cash on hand and don't intend to work regular hours, asset depletion home loans can be a great option for financing purposes. For example, if you've built up a large savings account over time or now have access to other types of liquid assets due to your retirement earnings, you may be eligible for one of these types of mortgages.

This type of borrower usually doesn't receive a W2 wage but instead has a sizeable amount of liquid assets at their disposal to use for financing purposes.

Using and asset depletion loan is ideal for older borrowers who have no more intentions of working regular hours and prefer to live on retirement funds.

The asset depletion home loan is ideal for older borrowers who have no more intentions of working regular hours and prefer to live on retirement funds. This type of home loan does not require any minimum or maximum asset requirement. It is also suitable for self-employed individuals who need a flexible repayment schedule that meets their needs.

On the other hand, this type of loan program is also ideal for self-employed individuals who are having difficulty qualifying through a traditional method such as having verifiable income or being able to show tax returns.

On the other hand, this type of loan program is also ideal for self-employed individuals who are having difficulty qualifying through a traditional method such as having verifiable income or being able to show tax returns. The fact is that many people in small businesses have no income or tax returns on which to base their creditworthiness.

This is where asset depletion home loans make perfect sense. They allow you to access the equity that you have built up in your home and use it as collateral for a mortgage loan without needing any form of verifiable income or tax returns. There are no limits on what type of property can be financed with this type of loan program; it can be used for primary residences, vacation homes, investment properties, rental properties (even if not owner occupied), etc., making them very versatile!

There is also no minimum or maximum asset requirement when using this type loan program, so it affords the borrower the opportunity to borrow what they need without feeling boxed into a certain amount.

The great thing about asset depletion loans is that they do not require you to have a job or even be employed. You can use the assets you already have, whether it's real estate equity or investment accounts like stocks and bonds, to qualify for this type of loan. It is also an ideal option for retirees who want to take out cash but don't want to dip into their retirement accounts.

This type of loan is perfect for those with self-employment income because there's no minimum amount required before taking out funds from your business account as collateral.

Conclusion

If you're planning on applying for an asset depletion home loan, it's important to note that this is not a product that every lender offers. Additionally, there are some requirements that must be met before qualifying for one of these loans. With all of this information in mind, if you have any questions about whether or not this type of loan program will work for your specific situation then contact us today!

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