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Asset Depletion Loans in Point Arena
Point Arena's coastal real estate attracts retirees and self-funded buyers who live off investments, not W-2s. Traditional lenders reject these borrowers despite seven-figure portfolios.
Asset depletion loans convert liquid assets into qualifying income. A $500,000 brokerage account becomes $8,333 monthly income using 60-month amortization, enough to qualify for most coastal properties.
This loan type fits Point Arena's demographic: seasonal residents, early retirees, and investors who don't need traditional employment. The town's limited inventory makes quick approvals critical.
You need $100,000 minimum in liquid assets after down payment and reserves. Most lenders require 680+ credit and 20-30% down, though some accept 10% down with higher rates.
Qualifying assets include checking, savings, stocks, bonds, mutual funds, and retirement accounts. Real estate equity and business assets don't count unless converted to cash.
Lenders divide your assets by 60 months to calculate income. A $600,000 portfolio generates $10,000 monthly income for qualification purposes, though actual distributions vary.
Only non-QM lenders offer asset depletion programs. These aren't Fannie Mae or FHA loans. Expect rates 1.5-3% above conventional, currently 8-10% for most borrowers.
Each lender uses different asset calculation methods. Some exclude retirement accounts under age 59.5. Others discount stock portfolios by 30% for volatility risk.
Most Point Arena properties fall under $2 million, which widens lender options. Above that threshold, you're limited to portfolio lenders with stricter asset requirements.
We see two main Point Arena use cases: retirees downsizing from cities and buyers holding assets in one spouse's name. The latter group fails bank statement loans but crushes asset depletion.
Don't liquidate investments to show income. That triggers taxes and defeats the purpose. Show the account statements and let the lender calculate qualifying income.
Timing matters on the coast. Get pre-approved before making offers. Asset verification takes 7-10 days as lenders request statements from multiple institutions.
Bank statement loans work better if you run business income through accounts. Asset depletion fits when you live off dividends, capital gains, or trust distributions.
Foreign national loans require similar down payments but don't need US credit. Choose asset depletion if you have established US credit history and want better rates.
DSCR loans suit rental properties. Asset depletion works for primary or second homes where you need personal income qualification, not just property cash flow.
Point Arena properties often need cash reserves for deferred maintenance and coastal upkeep. Lenders require 6-12 months reserves after depleting assets for income calculation.
Mendocino County appraisals take longer than urban markets. Budget three weeks minimum. Delayed appraisals push closing dates, which matters in competitive situations.
Coastal insurance costs run $3,000-$8,000 annually depending on wildfire and wind exposure. This affects debt-to-income ratios even with strong asset positions.
Some lenders exclude retirement accounts for borrowers under 59.5, while others allow them with documentation of penalty-free withdrawal options. This varies significantly by lender.
With 25% down ($175,000), expect to need $400,000-$500,000 in liquid assets after closing to generate sufficient qualifying income and meet reserve requirements.
Lenders use statement balances from a specific date, not real-time values. Some discount volatile portfolios by 20-30% when calculating qualifying assets.
Expect 30-45 days minimum due to rural appraisal timelines and asset verification across multiple institutions. Rush closings rarely happen in Mendocino County.
Larger down payments and stronger credit scores earn better pricing. Rate differences between lenders often exceed 0.5%, making broker shopping essential.
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.