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Asset Depletion Loans in Larkspur
Larkspur attracts retirees, entrepreneurs, and high-net-worth individuals who often hold significant assets but lack traditional W-2 income. Asset depletion loans bridge this gap by converting liquid investments into qualifying income.
Marin County's affluent demographic creates strong demand for alternative financing. Many Larkspur buyers possess substantial portfolios from successful businesses, stock options, or retirement planning but struggle with conventional underwriting.
This loan type works particularly well in Larkspur's competitive market where cash-rich buyers need financing flexibility. Lenders calculate monthly income by dividing total liquid assets by the loan term, typically 360 months.
Asset depletion loans require substantial liquid assets—typically $500,000 minimum across bank accounts, stocks, bonds, mutual funds, and retirement accounts. Credit scores generally need to reach 680 or higher.
Lenders divide your total qualifying assets by the loan term to establish monthly income. A borrower with $1.8 million in liquid assets receives $5,000 monthly qualifying income ($1,800,000 ÷ 360 months).
Down payments start at 20% for primary residences and 25-30% for second homes or investment properties. Debt-to-income ratios typically max out at 43%, calculated using the asset-derived monthly income.
Asset depletion loans fall under Non-QM lending, meaning fewer institutions offer them compared to conventional mortgages. Portfolio lenders and specialty finance companies dominate this space.
Rates typically run 1-2% higher than conventional loans due to the non-traditional qualification method. Closing timeframes extend to 30-45 days as lenders verify asset ownership and liquidity.
Not all asset types qualify equally. Retirement accounts often receive 70% valuation while liquid stocks and bonds qualify at 100%. Real estate equity and business interests typically don't count toward qualifying assets.
Working with a broker provides access to multiple asset depletion lenders with varying asset requirements and rate structures. Direct lenders limit your options and may not offer the most competitive terms.
Timing matters significantly. Volatile markets can affect asset valuations during underwriting. We recommend locking rates when asset values support your target loan amount and scheduling appraisals strategically.
Many Larkspur buyers combine asset depletion qualification with portfolio diversification strategies. Your financial advisor should coordinate with your mortgage broker to optimize both financing and long-term wealth management.
Bank statement loans suit self-employed borrowers with consistent business income, while asset depletion works better for those holding wealth in investments. Foreign national loans serve non-citizens, whereas asset depletion requires U.S. residency.
DSCR loans focus on rental property cash flow rather than personal assets. 1099 contractors often choose bank statement programs if they have business revenue but limited liquid assets.
Asset depletion offers the most straightforward documentation for retired executives or entrepreneurs who've sold businesses. You provide asset statements rather than tax returns, bank statements, or rental income documentation.
Larkspur's median home prices require substantial loan amounts where asset depletion qualification shines. The program accommodates jumbo loan sizes common throughout Marin County without hitting conforming loan limits.
Many Larkspur neighborhoods feature established residents downsizing from larger Marin properties while maintaining significant investment portfolios. Asset depletion facilitates these moves without income verification complications.
Proximity to San Francisco means many Larkspur buyers hold concentrated stock positions from tech company exits or executive compensation packages. These assets qualify for depletion calculations once shares vest and become liquid.
Qualifying assets include checking and savings accounts, stocks, bonds, mutual funds, and retirement accounts like IRAs and 401(k)s. Lenders typically value retirement accounts at 70% and liquid securities at 100%.
Most lenders require minimum $500,000 in liquid assets. Your total assets should exceed the loan amount to create sufficient monthly qualifying income when divided by the loan term.
No, assets remain invested. Lenders use a calculation method that treats a portion as available income. You don't actually withdraw or liquidate your portfolio for qualification purposes.
Rates vary by borrower profile and market conditions. Asset depletion rates typically run 1-2 percentage points higher than conventional mortgages due to the specialized underwriting approach.
Absolutely. Asset depletion specifically helps retirees who hold significant investments but lack W-2 income. This program converts portfolio value into qualifying income without employment verification.
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.