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Cerritos attracts retirees and self-funded entrepreneurs who hold wealth in stocks, bonds, and cash rather than W-2 paychecks. Asset depletion loans let you qualify based on liquid assets divided by the loan term.
This program fits buyers with $500K+ in accessible accounts who don't want to liquidate holdings. Lenders calculate monthly income by dividing your assets by 360 months for a 30-year loan.
Cerritos buyers often use this for downsizing from larger OC or LA properties. You convert home equity into liquid assets, then use those assets to qualify for your next purchase.
Asset Depletion Loans in Cerritos
You need verifiable liquid assets in accounts lenders can confirm. Qualifying assets include checking, savings, stocks, bonds, money market funds, and vested retirement accounts.
Lenders typically require 620+ credit and 20-30% down. They divide your total liquid assets by 360 months to calculate qualifying income. A $720K portfolio generates $2,000/month qualifying income.
Some lenders exclude a portion for reserves or retirement penalties. Expect to show 6-12 months of account statements proving the assets existed before application.
Local decision guide
Use this guide to connect asset depletion loans eligibility, lender expectations, and local market factors before comparing payment options in Cerritos.
Cerritos attracts retirees and self-funded entrepreneurs who hold wealth in stocks, bonds, and cash rather than W-2 paychecks. Asset depletion loans let you qualify based on liquid assets divided by the loan term.
This program fits buyers with $500K+ in accessible accounts who don't want to liquidate holdings. Lenders calculate monthly income by dividing your assets by 360 months for a 30-year loan.
Cerritos buyers often use this for downsizing from larger OC or LA properties. You convert home equity into liquid assets, then use those assets to qualify for your next purchase.
Asset depletion sits in the non-QM space. No conventional lender touches it. You're working with private investors who price risk differently than Fannie Mae.
Rates run 1-2% above conventional, currently in the 7.5-9% range depending on credit and down payment. Rates vary by borrower profile and market conditions.
Not every non-QM lender offers asset depletion. Some count 100% of assets, others discount retirement accounts by 30% for early withdrawal penalties. We shop across lenders to find the cleanest calculation for your portfolio mix.
Most Cerritos buyers using asset depletion fall into two camps: retirees moving from expensive areas and business owners who kept wealth in the market instead of taking salary.
The biggest mistake is not staging your accounts correctly. If you just moved money between accounts last month, lenders get nervous about source. Seasoning matters more than total balance.
I see deals crater when borrowers realize their $800K in assets only generates $2,222/month qualifying income. Run the math before house hunting. Know your buying power based on asset depletion calculation, not your gut feeling about net worth.
If you have business income but prefer not to document it, bank statement loans might price better. Asset depletion makes sense when you genuinely have no income to document.
Foreign nationals often choose asset depletion over DSCR when buying primary residences. DSCR requires investment properties with rental income. Asset depletion works for any property type.
The rate premium over conventional varies based on compensating factors. Strong credit and 30% down can narrow the spread. Minimal assets relative to loan amount widens it.
Cerritos homes in the $700K-$900K range need roughly $1.4M-$1.8M in liquid assets at 30% down. That's using conservative qualifying ratios and assuming minimal other debt.
Los Angeles County transfer taxes add to closing costs. Factor an extra 0.45% county transfer tax plus 0.11% city transfer tax on top of standard closing expenses.
HOA communities dominate Cerritos housing stock. Lenders add HOA dues to your debt ratio. A $400/month HOA payment reduces your qualifying power by roughly $100K in purchase price using asset depletion.
Checking, savings, stocks, bonds, mutual funds, money market accounts, and vested retirement accounts all qualify. Most lenders exclude real estate equity and business assets.
Yes, but lenders typically discount them by 20-30% to account for early withdrawal penalties. A $500K IRA might only count as $350K toward qualification.
Expect 7.5-9% based on current conditions, credit score, and down payment. This runs 1-2% above conventional rates. Rates vary by borrower profile and market conditions.
Most lenders require 20-30% down. Larger down payments often unlock better rates and more favorable asset calculation methods.
Plan for 30-45 days from application to close. Non-QM loans take longer than conventional because underwriters manually review all account statements and asset documentation.
Yes, publicly traded stocks in brokerage accounts work well. Lenders use recent statement values and may average balances across several months to smooth volatility.