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West Covina homebuyers with substantial savings but non-traditional income face roadblocks with conventional loans. Asset depletion loans let you qualify using liquid assets instead of W-2 income.
Retirees, investors, and entrepreneurs in West Covina hold significant wealth in stocks, bonds, and bank accounts. Lenders convert those assets into qualifying income using a simple formula.
This loan type works especially well in established West Covina neighborhoods where buyers downsize or relocate with accumulated wealth. You skip the income documentation maze entirely.
Asset Depletion Loans in West Covina
Lenders divide your total liquid assets by 360 months to calculate monthly qualifying income. A borrower with $500,000 in assets shows $1,389 monthly income on paper.
You need at least $200,000 in verifiable liquid assets after your down payment and closing costs. Credit scores typically start at 680, though some lenders go lower.
Assets must be liquid — stocks, bonds, mutual funds, savings, or CDs. Retirement accounts like 401(k)s and IRAs usually count at 70% value since lenders discount for early withdrawal penalties.
Local decision guide
Use this guide to connect asset depletion loans eligibility, lender expectations, and local market factors before comparing payment options in West Covina.
West Covina homebuyers with substantial savings but non-traditional income face roadblocks with conventional loans. Asset depletion loans let you qualify using liquid assets instead of W-2 income.
Retirees, investors, and entrepreneurs in West Covina hold significant wealth in stocks, bonds, and bank accounts. Lenders convert those assets into qualifying income using a simple formula.
This loan type works especially well in established West Covina neighborhoods where buyers downsize or relocate with accumulated wealth. You skip the income documentation maze entirely.
Asset depletion loans come from non-QM lenders exclusively. Banks like Chase and Wells Fargo stopped offering these programs years ago.
We access 40+ non-QM lenders who price asset depletion loans differently. One lender might cap at 75% LTV while another goes to 80% with higher reserves.
Rates run 1-2% above conventional loans because these carry more perceived risk. Borrowers with $1 million plus in assets often get better pricing than those closer to minimum thresholds.
Most West Covina buyers pursuing asset depletion loans bring $500,000+ in liquid assets. Below that threshold, bank statement or DSCR loans often price better.
Lenders scrutinize where assets came from. Recent large deposits trigger questions. Maintain account balances for at least two months before applying.
I've seen retirees with $2 million in assets get denied because they withdrew too much for renovations before closing. Leave cushion beyond minimum requirements.
Bank statement loans require 12-24 months of business deposits and work better for active business owners. Asset depletion suits retirees or investors with passive income.
Foreign national loans overlap with asset depletion but don't require U.S. credit history. If you're a U.S. citizen with established credit, asset depletion typically costs less.
DSCR loans focus on rental property cash flow, not personal assets. Use those for investment properties. Asset depletion works for primary homes and second homes in West Covina.
West Covina sits in Los Angeles County where property taxes and insurance drive higher monthly payments. Lenders calculate debt-to-income using your asset-derived income.
Many West Covina buyers use asset depletion loans for condos near The Heights or single-family homes south of the 10 freeway. HOA fees factor into qualification ratios.
Appraisals in West Covina move quickly since comparable sales are plentiful. The asset verification process takes longer — expect 30-45 days from application to clear-to-close.
Yes, but lenders discount retirement accounts to 70% of value to account for potential early withdrawal penalties. You can also use IRAs, stocks, bonds, and savings accounts.
Most lenders require 680, though some go as low as 660. Higher credit scores above 720 unlock better rates and lower reserve requirements.
Expect at least $200,000 in liquid assets remaining after down payment and closing costs. Lenders want to see substantial reserves beyond the minimum calculation.
Some lenders allow it, but DSCR loans usually price better for rentals. Asset depletion works best for primary homes and second homes.
Asset verification adds 10-15 days since lenders need two months of statements for all accounts. Plan for 30-45 days total from application to closing.