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Asset Depletion Loans in Los Banos
Los Banos borrowers with substantial assets but non-traditional income face roadblocks with conventional lenders. Asset depletion loans solve this by converting liquid holdings into qualifying income.
This program fits retirees, entrepreneurs selling businesses, and investors in Merced County who hold wealth in stocks, bonds, or retirement accounts. Your portfolio becomes your income verification.
Los Banos' agricultural economy creates unique scenarios—landowners liquidating assets, farm operators with fluctuating W-2s, and professionals relocating with significant savings but minimal employment history.
Most lenders require $500k minimum in liquid assets to consider asset depletion. Credit scores typically need to hit 680-700, though some programs accept 660 with larger portfolios.
Your assets get divided by 60-360 months depending on the lender's formula. A $1.2M portfolio divided by 120 months creates $10k monthly qualifying income, regardless of actual earnings.
Acceptable assets include checking, savings, stocks, bonds, mutual funds, and sometimes retirement accounts. Real estate equity and illiquid business interests don't count for most programs.
Asset depletion sits firmly in non-QM territory. You won't find this at Wells Fargo or Chase. Only specialized wholesale lenders offer these programs, and their terms vary dramatically.
Some lenders cap loans at $2M. Others go to $5M for borrowers with $10M+ portfolios. The dividing formula changes by lender—60 months is aggressive, 360 months is conservative.
Rates run 1.5-3 points above conventional, currently landing around 8-10% depending on your credit and down payment. Expect 20-30% down as standard, though 15% works with stronger profiles.
We access 15+ non-QM lenders who handle asset depletion differently. One might use your IRA balance, another won't. Shopping this loan requires comparing actual underwriting guidelines, not just rates.
The biggest mistake is liquidating assets to show bank deposits. That triggers tax events and doesn't help—we need the statement showing the balance, not the cash sitting in checking.
Timing matters. If you're selling a business or receiving an inheritance, wait until funds are liquid and seasoned 60 days before applying. Lenders want to see stable balances, not sudden spikes.
Los Banos borrowers often underestimate how well this works for retirement scenarios. A 62-year-old with $800k in a 401k and Social Security gets crushed by conventional income limits but sails through asset depletion.
Watch the debt-to-income calculation. Even though your assets create qualifying income, your actual monthly obligations still matter. That $2k pension helps, but the $1,500 car payment hurts.
Bank statement loans work better if you have business revenue but messy tax returns. Asset depletion makes sense when you have wealth but minimal income documentation of any kind.
DSCR loans beat asset depletion for investment properties because they ignore personal income entirely. But for primary residences in Los Banos, asset depletion is often the only non-income path.
Foreign national programs sometimes accept assets, but they require 30-40% down and won't touch your IRA. Asset depletion gives U.S. citizens better terms and more asset flexibility.
Los Banos home prices stay reasonable compared to coastal California, meaning your asset portfolio stretches further here. A $1.5M portfolio that barely qualifies for a median Bay Area home comfortably covers local purchases.
Merced County appraisals move slower than metro areas. Budget 3-4 weeks for appraisal completion, and understand that rural comparable sales matter. Your lender needs experience with Central Valley properties.
Agricultural property requires extra scrutiny. If you're buying land with a home, some asset depletion lenders treat it as commercial. Stick to residential parcels under 5 acres to avoid complications.
Los Banos has limited luxury inventory. If you're deploying serious assets for a primary residence here, you're likely relocating or retiring. Work with a lender who understands the local market isn't inflated—your purchase price should make underwriting sense given the area.
Most lenders want $500k minimum in liquid assets. Larger portfolios unlock better rates and lower down payments.
Some lenders accept retirement accounts, others don't. We compare which lenders will use your specific asset types.
Your total liquid assets get divided by 60-360 months depending on the lender. That monthly figure becomes your qualifying income.
No. You prove the assets exist with statements, but don't liquidate them. You'll still need cash for down payment and closing costs separately.
Rates vary by borrower profile and market conditions, but currently land around 8-10%. Stronger credit and larger down payments lower your rate.
Figure 30-45 days total. Documentation moves faster than tax return loans, but non-QM underwriting is more manual than conventional.
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.