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Lafayette's housing market attracts retirees and high-net-worth buyers who don't fit the W-2 mold. Asset depletion loans let you qualify based on savings, investments, and liquid assets instead of paystubs.
This program works well here because Lafayette buyers often have significant portfolios but irregular income streams. You prove ability to pay through assets, not employment letters.
Lenders calculate your qualifying income by dividing total liquid assets by 360 months. If you have $1.8M in accounts, that's $5,000 monthly qualifying income before considering any actual earnings.
You typically need 20-30% down and credit scores above 680. Retirement accounts, stocks, bonds, and savings all count toward your asset total.
Asset depletion falls under non-QM, so you won't find it at Wells Fargo or Chase. You need a broker who works with specialty lenders offering these programs.
Rates run 1-2% above conventional because lenders assume more risk. But if you have the assets and can't document traditional income, the rate premium beats sitting on the sidelines.
Most Lafayette clients using asset depletion are either recently retired or own businesses that generate cash they keep in the company. They have money but their tax returns show minimal personal income.
The calculation is straightforward but lenders vary on what assets they'll count. Some exclude IRAs until you're 59½, others count them at a discount. Shop this carefully.
If you're self-employed with strong bank deposits, bank statement loans might offer better rates. If you own rental property, DSCR loans skip personal income entirely.
Asset depletion shines when you have significant liquid wealth but no clean income story. It's the fallback that works when other non-QM options don't fit.
Lafayette's median home prices demand substantial asset reserves to qualify through depletion. You need roughly $1.2M in liquid assets to generate enough qualifying income for a $1M purchase.
This isn't a starter home program. It's built for established buyers with wealth in portfolios rather than paychecks, which fits Lafayette's demographic well.
Checking, savings, stocks, bonds, and mutual funds typically count at full value. Retirement accounts may count at 70% or require age 59½ depending on the lender.
Yes, lenders add your calculated asset income to any documented W-2 or 1099 income. This helps you qualify for larger loan amounts.
Expect to need $3,000-4,000 in assets for every $1,000 of monthly qualifying income needed. A $6,000 monthly payment requires roughly $2.2M in countable assets.
No, you keep your investments. Lenders verify balances but don't require you to sell anything unless needed for down payment or closing costs.
Most lenders require 20-30% down for asset depletion loans. Lower down payments increase both rate and required asset levels.
Asset Depletion Loans in Lafayette