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Pasadena's higher-end market attracts retirees and entrepreneurs who hold wealth in stocks, bonds, and cash rather than W-2 paychecks. Asset depletion loans let you qualify using these holdings instead of traditional income.
This loan type works well in areas with established wealth like San Marino borders and Chapman Woods. Lenders calculate your qualifying income by dividing liquid assets by the loan term—typically 60 or 84 months.
You need substantial reserves to make the math work. Most approvals require $500k+ in eligible assets after down payment and closing costs.
Asset Depletion Loans in Pasadena
Minimum credit score runs 680-700 depending on asset strength. Higher reserves let you qualify with lower credit. Down payment starts at 20% for primary residences, 25-30% for investment properties.
Eligible assets include checking, savings, stocks, bonds, and vested retirement accounts. Lenders typically discount retirement funds by 30-40% to account for penalties and taxes.
You cannot include real estate equity, annuities, or unvested stock options. The property you're buying doesn't count toward qualifying assets either.
Local decision guide
Use this guide to connect asset depletion loans eligibility, lender expectations, and local market factors before comparing payment options in Pasadena.
Pasadena's higher-end market attracts retirees and entrepreneurs who hold wealth in stocks, bonds, and cash rather than W-2 paychecks. Asset depletion loans let you qualify using these holdings instead of traditional income.
This loan type works well in areas with established wealth like San Marino borders and Chapman Woods. Lenders calculate your qualifying income by dividing liquid assets by the loan term—typically 60 or 84 months.
You need substantial reserves to make the math work. Most approvals require $500k+ in eligible assets after down payment and closing costs.
About 15-20 of our wholesale lenders offer asset depletion programs. Each uses different asset calculations and discount rates for retirement funds.
Some lenders divide assets by 60 months, others use 84 or even 120. A longer term creates higher monthly qualifying income from the same asset base.
Rate pricing varies significantly based on credit score, LTV, and total asset depth. Shopping across multiple non-QM lenders often saves 0.50-0.75% on rate.
I see two borrower types use this loan: retirees with stock portfolios and business owners keeping wealth outside their company. Both struggle with traditional income documentation.
The biggest mistake is not accounting for the asset discount. If you show $800k in an IRA, lenders count it as $480k-$560k after penalties. Run the math before you commit to a purchase price.
Combining asset depletion with other income sources sometimes works. One lender will blend your pension or social security with asset calculations for stronger qualifying power.
Bank statement loans work better if you run significant cash through business accounts. Asset depletion makes sense when your wealth sits in investments instead.
Foreign national loans require larger down payments but don't need US credit. If you have the assets but limited US history, compare both options.
DSCR loans fit investment property buyers who want the property income to qualify them. Asset depletion works for any property type using your existing holdings.
Pasadena's established neighborhoods attract buyers downsizing from larger homes with substantial equity to invest. Asset depletion lets them buy without income verification.
Property taxes in Pasadena run higher than many LA County areas. Lenders include these in debt-to-income calculations, so higher tax bills reduce your maximum loan amount.
HOA fees in Pasadena condos impact qualifying just like property taxes. Budget for both when calculating how much house your assets support.
Checking, savings, stocks, bonds, mutual funds, and vested retirement accounts all count. Lenders discount retirement funds by 30-40% to account for taxes and penalties.
Yes, but lenders apply a 30-40% penalty discount since you'd pay taxes and early withdrawal fees. Vested balance minus discount equals qualifying amount.
Most deals require $500k+ in liquid assets after your down payment and closing costs. Less than that makes the income calculation too tight for approval.
Some lenders charge prepayment penalties, others don't. Typical penalties last 3-5 years and decrease over time if they apply.
Rates vary by borrower profile and market conditions. Expect 1-3% above conventional rates depending on credit score, LTV, and asset depth.