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Asset Depletion Loans 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.
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.
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.
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.