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Lakewood has retired executives, business owners, and high-net-worth buyers who hold wealth in assets instead of paychecks. Asset depletion loans let you qualify using retirement accounts, investment portfolios, and liquid holdings.
This loan type works for buyers with substantial savings but little traditional income. Lenders calculate monthly income by dividing your total liquid assets by a set number of months, typically 360.
Asset Depletion Loans in Lakewood
You need significant liquid assets to make the math work. Most lenders require at least $500,000 in verifiable accounts after subtracting the down payment and reserves.
Credit scores typically start at 680. Lenders verify funds through recent bank and brokerage statements, then divide your balance by 360 months to calculate monthly income for qualification purposes.
Asset depletion sits in the non-QM space. Most conventional lenders won't touch it. You need a broker with access to portfolio lenders and private capital sources.
Rates run 1-2% higher than conventional mortgages. The asset calculation formula varies by lender—some use 360 months, others use 240. That math determines how much home you can afford.
Most retirees think they can't qualify because they don't receive a paycheck. Their $2 million portfolio earns $40,000 annually, but asset depletion turns that $2 million into $5,555 monthly income for qualification.
The biggest mistake is liquidating assets to buy cash. Keep your portfolio intact and use asset depletion. You preserve investment returns and avoid capital gains taxes while still getting the home.
Bank statement loans work better if you have business revenue but messy tax returns. Asset depletion fits retired buyers or those living off investments with minimal reportable income.
Foreign national loans require different documentation for non-U.S. citizens. DSCR loans focus on rental property cash flow, not personal assets. Choose the program that matches your actual financial situation.
Lakewood sits in Los Angeles County with property taxes around 1.1% of assessed value. Your asset depletion income calculation must cover PITI plus any HOA fees in planned communities.
Many Lakewood buyers use this program for downsizing after selling larger homes. The proceeds combine with existing retirement accounts to create substantial qualifying assets without ongoing employment.
Checking, savings, stocks, bonds, mutual funds, and retirement accounts like IRAs and 401(k)s. Real estate equity and whole life insurance cash value typically don't qualify.
Yes. Lenders calculate income from the account balance without requiring actual withdrawal. Your portfolio stays invested throughout the loan term.
Divided by 360 months equals $2,778 monthly income. That supports roughly $450,000-$550,000 purchase price depending on rates, taxes, and your other debts.
Yes. Lenders require 2-3 months of statements showing consistent balances. Large recent deposits need sourcing to prove the funds belong to you.
Lenders use the balance from statement dates, not live market values. Minor fluctuations won't affect approval if your statements show sufficient funds.