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Asset Depletion Loans in Hawthorne
Hawthorne attracts retirees and investors with significant assets but limited W-2 income. Asset depletion loans turn your liquid holdings into qualifying income without touching your principal.
This loan works for buyers who sold a business, inherited wealth, or built portfolios outside traditional employment. Lenders divide your liquid assets by 360 months to calculate monthly income for qualification.
Hawthorne's proximity to LAX and aerospace employers creates a market where high-net-worth professionals often hold wealth in stocks and bonds instead of paychecks. Traditional underwriting ignores these buyers completely.
You need substantial liquid assets to make the math work. A $600,000 home requires around $1.8 million in qualifying assets to support the debt ratio calculation.
Acceptable assets include checking, savings, stocks, bonds, mutual funds, and retirement accounts. Some lenders apply a 30% penalty to retirement funds since early withdrawal triggers taxes.
Credit scores start at 660 for most programs, though some lenders go to 640 with compensating factors. You'll put down at least 20% since asset depletion falls under non-QM guidelines.
Only non-QM lenders offer asset depletion programs. Traditional banks and credit unions can't touch these loans under Qualified Mortgage rules.
Rates run 1-2% above conventional loans since asset depletion carries higher perceived risk. Expect 7.5-9% in current market conditions, though rates vary by borrower profile and market conditions.
Most lenders cap asset depletion loans at $3 million, though a few go higher for exceptional borrowers. Loan-to-value ratios max out at 80% regardless of your asset size.
Asset depletion works best when you have 3-5x the loan amount in liquid assets. Marginal cases get declined or priced terribly. If you're borderline, bank statement loans often approve faster with better terms.
We see Hawthorne buyers using this for second homes near SpaceX or investment properties they plan to hold long-term. The higher rate matters less when you're parking capital strategically.
Lenders scrutinize sudden deposits and asset transfers. That $2 million needs 60 days of seasoning in your accounts. Moving money between accounts three weeks before application kills most deals.
Bank statement loans beat asset depletion for most self-employed borrowers. If you can show 12-24 months of deposits, you'll get better rates and higher leverage.
Foreign national loans overlap with asset depletion when buyers hold offshore assets. Some lenders blend both programs for international clients purchasing Hawthorne real estate.
DSCR loans make more sense for pure investment plays. Asset depletion works for primary residences or vacation homes where rental income doesn't apply.
Hawthorne sits in a high-cost Southern California market where asset depletion borrowers compete against conventional buyers. Your offer needs strength beyond just approval—think large earnest deposits and quick closes.
Property types matter. Lenders approve single-family homes and condos easily. Mixed-use properties or homes needing significant repairs trigger additional overlays that shrink your eligible lender pool.
Los Angeles County transfer taxes and homeowner association rules add costs that affect your asset calculation. Factor these into your debt ratio before assuming you qualify.
Plan for 3x your loan amount minimum. A $500,000 loan typically requires $1.5-2 million in liquid assets to meet debt ratio requirements comfortably.
Yes, but lenders apply a 30% penalty to account for early withdrawal taxes. A $1 million IRA counts as $700,000 toward your asset calculation.
Expect 1-2% higher rates. Asset depletion currently runs 7.5-9% depending on your profile, while conventional loans sit around 6.5-7%. Rates vary by borrower profile and market conditions.
Yes, though DSCR loans often make more sense for pure rentals. Asset depletion shines for second homes or properties you'll eventually occupy.
Count on 30-45 days. Asset verification takes longer than income verification since lenders audit multiple account statements and trace large deposits.
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.