In real estate investment, having the flexibility to take advantage of a great opportunity when it arises can make a huge difference between an average portfolio and an exceptional one.
But what if your income isn’t conventionally steady? What if you’re self-employed or retired, with most of your wealth tied up in assets rather than a regular paycheck?
This is where Asset Qualifier, or Asset Depletion loans, can come into play.
What are Asset Qualifier/Asset Depletion Loans?
Asset Qualifier/Asset Depletion loans, sometimes known as asset-based or asset dissipation loans, offer a unique way for investors to secure funding. Unlike traditional loans that focus on income docs like W2s and tax returns, these loans consider the borrower’s assets as a means to repay the loan.
What kind of assets are we talking about? The list is extensive. You can consider and use everything from stocks, bonds, and cash equivalents to retirement accounts to qualify for this non-qualified mortgage (Non-QM) loan solution.
Who Can Benefit from Asset Qualifier/Asset Depletion Loans?
Asset Qualifier/Asset Depletion loans are particularly beneficial for real estate investors, self-employed individuals, retirees, or anyone with substantial assets but irregular income.
If you have significant funds tied up in investments, retirement accounts, or other liquid assets, this type of loan provides an avenue to leverage those assets for investment opportunities.
Why Consider Asset Qualifier/Asset Depletion Loans?
The beauty of these loans lies in their flexibility. They offer an alternative route to loan qualification that doesn’t rely on traditional employment or income factors. This is especially advantageous for real estate investors who often deal with fluctuating income levels.
Plus, with Asset Depletion loans, there’s no need to liquidate your assets to secure funding. Your assets remain intact and continue to potentially grow in value while also serving as collateral for your loan.
How Do Asset Qualifier/Asset Depletion Loans Work?
The process of qualifying for an Asset Qualifier/Asset Depletion Loan is straightforward. Your personal balance sheet is evaluated to gain a complete view of your financial standing. This means assessing the value of your liquid assets and determining a hypothetical monthly income. This ‘income’ is then used to calculate your loan-to-value (LTV) ratio and debt-to-income (DTI) ratio, just as it would be with a conventional loan.
At LendSure, we consider 100% of your cash and equivalents, 80% of your stocks and bonds, and 70% of your retirement accounts when determining your eligibility for a loan. Our underwriting process allows for a higher qualifying monthly income.
For example, we divide your total assets by 60 to calculate your eligible monthly income. This differs from standard Asset Depletion programs that typically divide assets by 120 months. With our Asset Qualifier/Asset Depletion loan program, your qualifying monthly income amount is essentially doubled.
Learn more about our program highlights here.
Why Choose LendSure?
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers, ratios, and data to consider, but we know that behind every file, there’s an individual with unique circumstances seeking a loan.
We’re redefining the mortgage experience one loan at a time. Thanks to our common-sense approach and dedicated lending team, we say ‘yes’ more often to today’s homeowners and investors.
Ready to reach out to learn more about Bank Statement loans for investors like you? Contact us today!
