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Asset Depletion Loans in Covina
Covina's housing market attracts retirees and high-net-worth buyers who hold wealth in assets, not W-2 income. Asset depletion loans let you qualify using investment accounts, retirement funds, and liquid holdings.
This loan type works well for San Gabriel Valley buyers with substantial portfolios but limited taxable income. Lenders calculate a monthly income figure by dividing your assets by the loan term, typically 360 months.
You need significant liquid assets to make this work. Most lenders require $500,000 minimum in verified accounts, though some programs start at $250,000 for smaller loan amounts.
Credit requirements sit around 680-700 minimum. Lenders divide your total assets by 360 months to create a qualifying income, then apply standard debt-to-income calculations against that figure.
Asset depletion lives in the non-QM space, so you won't find it at Wells Fargo or Chase. Portfolio lenders and specialty non-QM shops offer these programs with varying asset calculation methods.
Some lenders count 100% of liquid assets, others use 70% to account for market volatility. Retirement accounts like IRAs and 401(k)s typically qualify at 70% of value since you'd face penalties on early withdrawal.
This loan fits a narrow profile: significant assets, minimal income, good credit. We see it work for early retirees in Covina's established neighborhoods who sold businesses or inherited wealth.
Rates run 1-2% higher than conventional loans. You're paying for underwriting flexibility. If you have any W-2 or 1099 income, bank statement loans often price better and require fewer assets.
Bank statement loans require just 12-24 months of deposits to qualify and typically offer better rates. If you're self-employed with business income flowing through your accounts, that route beats asset depletion.
Foreign national loans work for non-US citizens with assets abroad. DSCR loans fit investors who want rental income to qualify the property. Asset depletion makes sense only when you have substantial holdings but no income stream.
Covina's median home prices in older neighborhoods stay below $800K, making asset depletion viable with $500K-$750K in liquid assets. Newer developments in north Covina push higher and require larger portfolios.
Los Angeles County transfer taxes and HOA fees in planned communities affect your qualifying ratios. Your calculated asset-based income needs to cover PITI plus these recurring costs at acceptable DTI levels.
Checking, savings, stocks, bonds, mutual funds, and retirement accounts all count. Most lenders discount retirement accounts to 70% of value due to early withdrawal penalties.
Yes, if your spouse co-signs the loan. All borrowers on the mortgage can combine their verified assets for the qualification calculation.
Expect 1-2% higher interest rates. Rates vary by borrower profile and market conditions, with larger asset portfolios sometimes qualifying for better pricing.
No, assets stay invested. Lenders verify holdings through statements but don't require you to convert them to cash for the purchase.
That works, but lenders will discount the value. A $1M IRA might count as $700K in qualifying assets due to tax and penalty considerations.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.