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San Dimas homebuyers with substantial assets often hit walls with traditional lenders. Retirees, entrepreneurs, and high-net-worth individuals don't fit the W-2 template.
Asset depletion loans use your investment accounts and liquid holdings to prove income. Lenders divide your total assets by 360 months to calculate qualifying monthly income.
This works well in San Dimas where buyers include early retirees from tech and professionals with irregular income. The city's mix of move-up buyers and downsizers creates strong demand for asset-based qualification.
Asset Depletion Loans in San Dimas
You need significant liquid assets to make this work. Most lenders want 620+ credit and $500,000+ in verifiable accounts after your down payment.
The formula is straightforward: total liquid assets divided by 360 equals monthly income. A borrower with $1.8 million in stocks qualifies for $5,000 monthly income.
You can use retirement accounts, brokerage accounts, money markets, and savings. Real estate equity and illiquid holdings don't count toward the calculation.
Local decision guide
Use this guide to connect asset depletion loans eligibility, lender expectations, and local market factors before comparing payment options in San Dimas.
San Dimas homebuyers with substantial assets often hit walls with traditional lenders. Retirees, entrepreneurs, and high-net-worth individuals don't fit the W-2 template.
Asset depletion loans use your investment accounts and liquid holdings to prove income. Lenders divide your total assets by 360 months to calculate qualifying monthly income.
This works well in San Dimas where buyers include early retirees from tech and professionals with irregular income. The city's mix of move-up buyers and downsizers creates strong demand for asset-based qualification.
Asset depletion sits in the non-QM space where lender overlays vary dramatically. One lender might require 12 months reserves while another wants 24 months.
We work with about 30 lenders who offer these programs with different asset treatment rules. Some count 70% of retirement accounts while others use 100% of liquid holdings.
Rate pricing depends on leverage and asset type. Expect rates 1-2% above conventional programs, with better pricing if you put down 25%+ or have substantial post-closing liquidity.
Most applicants discover this program after a bank says no. They have $2 million in a brokerage account but can't document traditional income.
The biggest mistake is pulling money out before closing. Lenders need to see consistent asset balances through funding, and sudden withdrawals trigger underwriting questions.
San Dimas buyers often combine this with renovation financing for older properties. The asset calculation gives you flexibility that traditional income verification can't match.
Bank statement loans work better if you have business revenue flowing through accounts. Asset depletion makes sense when wealth is invested, not deposited monthly.
DSCR loans beat this for investment properties where rental income covers the mortgage. Asset depletion shines for primary residences where you're not generating monthly cash flow.
The trade-off is rate versus simplicity. Bank statements get better pricing but require 12-24 months of statements and explanation letters for every deposit.
San Dimas attracts buyers leaving coastal markets with substantial equity. They're asset-rich but may lack traditional employment after selling businesses or retiring early.
The city's foothill location and good schools draw families upgrading from starter homes. Asset depletion works when stock portfolios exceed annual income but won't show on tax returns yet.
Properties in San Dimas typically require smaller loan amounts than coastal LA, which helps with asset depletion ratios. Lower leverage means easier qualification with the same asset base.
Plan on $500,000+ in liquid assets after your down payment and closing costs. The exact amount depends on the purchase price and your other qualifying factors.
Most lenders count 70-100% of retirement account balances depending on age and account type. IRAs and 401(k)s typically qualify if accessible without penalty.
Rates typically run 1-2% above conventional loans. Exact pricing depends on credit score, down payment, and total liquidity after closing.
Yes, lenders use recent statement values and may average balances over 2-3 months. Significant volatility might require larger reserves as cushion.
Expect 3-4 weeks from application to clear-to-close. Asset verification is simpler than income documentation, but lenders scrutinize large transfers and account history.
Liquidating assets before closing is fine if you document the source and maintain required post-closing reserves. Avoid unexplained transfers during underwriting.