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Asset Depletion Loans in Hawaiian Gardens
Hawaiian Gardens attracts retirees, entrepreneurs, and investors who hold significant wealth in stocks, bonds, and retirement accounts rather than W-2 income. Asset depletion loans serve these borrowers by converting liquid assets into qualifying income.
This non-QM option works particularly well for individuals who've sold businesses, retired early, or maintain wealth through investments. Los Angeles County's diverse economy creates many situations where traditional income documentation doesn't reflect true financial strength.
Lenders calculate qualifying income by dividing total liquid assets by a set number of months, typically 60-360 depending on the program. This approach recognizes that substantial savings can fund mortgage payments just as reliably as a paycheck.
Most asset depletion programs require $500,000 to $2 million in verifiable liquid assets, depending on the loan amount and property value. These assets can include stocks, bonds, mutual funds, retirement accounts, and cash reserves.
Credit scores typically need to reach 680 or higher, though some programs accept 660 with larger asset holdings. Down payments start at 20-30% for most properties, with investment properties requiring 25-35% down.
You'll provide recent bank and brokerage statements showing account balances. Lenders verify these assets have been seasoned for at least two months to prevent last-minute transfers that inflate balances artificially.
Asset depletion loans come from non-QM lenders rather than conventional banks. These specialized lenders maintain their own underwriting guidelines and portfolio their loans instead of selling to Fannie Mae or Freddie Mac.
Rates vary by borrower profile and market conditions, but expect pricing 1-3% above conventional loans. The premium reflects the alternative documentation and perceived risk, though your substantial assets demonstrate clear ability to repay.
Working with a broker provides access to multiple non-QM lenders simultaneously. Different lenders calculate asset depletion differently—some divide by 60 months, others by 84 or 120—so comparing options matters significantly.
The asset calculation method dramatically affects your buying power. A lender dividing $1.2 million by 60 months creates $20,000 monthly qualifying income, while division by 120 months yields only $10,000—same assets, vastly different results.
Retirement accounts present special considerations. Some lenders count 100% of IRA or 401(k) balances, while others apply a 70% discount to account for taxes and early withdrawal penalties. Know which calculation your lender uses before applying.
Combining asset depletion with other income sources strengthens applications. If you have some Social Security, rental income, or part-time earnings, these stack on top of your asset-derived income to increase borrowing capacity.
Bank statement loans serve self-employed borrowers with business income, while asset depletion loans help those living off investments. If you operate a business, bank statements might provide better qualification; if you're retired or between ventures, assets work better.
Foreign national loans require similar down payments but focus on international borrowers. Asset depletion welcomes U.S. citizens and residents who simply don't have traditional paystubs but possess substantial savings or investment accounts.
DSCR loans qualify investors based on rental income from the property itself. Asset depletion works for any property type—primary residence, second home, or investment—making it more flexible when rental income doesn't cover the mortgage.
Hawaiian Gardens sits within Los Angeles County, where property taxes and insurance costs factor into total housing expenses. Lenders calculate your debt-to-income ratio using the full PITI payment plus other obligations, so asset-derived income must cover all monthly costs.
The city's proximity to Orange County and central Los Angeles makes it attractive for investors and retirees seeking more affordable entry points. Asset depletion loans accommodate borrowers downsizing from expensive areas or purchasing investment properties with accumulated equity.
California requires specific disclosures for non-QM loans. Your lender must clearly explain that these mortgages don't meet qualified mortgage standards, though this doesn't prevent approval—it simply ensures you understand the loan structure and terms upfront.
Checking, savings, stocks, bonds, mutual funds, and retirement accounts typically qualify. Most lenders require assets be liquid and verifiable through statements. Real estate equity and business assets generally don't count.
Yes, lenders calculate qualifying income from retirement account balances without requiring actual withdrawals. You simply demonstrate the assets exist and could theoretically fund payments if needed.
Expect 30-45 days from application to closing, similar to other mortgages. The main difference is providing brokerage statements instead of paystubs. Clear documentation speeds the process considerably.
Not perfect, but solid credit helps. Most programs accept 680-700 scores, with some going to 660 for borrowers with substantial assets. Higher credit scores access better rates and terms.
Absolutely. Asset depletion works for purchases and refinances. Many borrowers use this option to eliminate PMI, access equity, or secure better terms when traditional income documentation doesn't apply.
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.