Loading
Asset Depletion Loans in Merced
Merced's real estate market attracts buyers with substantial savings but irregular income streams. Asset depletion loans let you qualify using retirement accounts, investment portfolios, and liquid assets instead of W-2s or tax returns.
This loan type works well for retirees, trust beneficiaries, and investors with significant wealth but minimal documented income. Lenders divide your total liquid assets by 360 months to calculate a qualifying income figure.
Most Merced buyers using asset depletion have $500K+ in verifiable accounts. The approach sidesteps employment verification entirely, making it faster than traditional mortgage processes.
You need at least 20% down, sometimes 25% for properties above certain thresholds. Credit scores typically start at 680, though some lenders go to 660 with compensating factors like larger down payments.
Asset calculation includes checking, savings, money market accounts, stocks, bonds, and retirement funds. Real estate equity doesn't count. Lenders require 60-90 days of recent statements proving you've maintained these balances.
Reserve requirements run higher than conventional loans. Expect to show 6-12 months of mortgage payments in liquid assets after closing, not counted toward your qualifying calculation.
Asset depletion sits in the non-QM space, which means fewer lenders offer it compared to conventional programs. SRK CAPITAL accesses 15-20 wholesale lenders with asset depletion products, each with different asset calculation methods.
Some lenders apply a 70% haircut to retirement accounts to account for early withdrawal penalties. Others count 100% if you're over 59½. These calculation differences can shift your qualifying amount by $100K+ in purchasing power.
Rate pricing varies widely across lenders. You might see a 1.5-2 point spread between the most and least competitive options, which is why shopping multiple lenders matters more with non-QM than conventional.
Most Merced borrowers pursuing asset depletion have tried conventional channels first and hit income documentation walls. The loan closes faster than bank statement programs because there's no ratio analysis or income trending required.
I place clients with $1M+ in assets but under $50K in documented annual income regularly. The math works: $1M divided by 360 equals $2,778 monthly qualifying income before any haircuts, which supports a $400K+ purchase depending on other debts.
Watch for lenders that penalize liquid assets too heavily. A 30% haircut on all assets versus selective penalties on retirement accounts can cost you $150K in buying power with the same asset base.
Bank statement loans make sense if you have business income flowing through accounts. Asset depletion works better when your wealth sits static in investments rather than cycling through operating accounts monthly.
Compared to DSCR loans, asset depletion lets you buy a primary residence without rental income requirements. DSCR only works for investment properties where rent covers the mortgage.
Foreign national loans require larger down payments, typically 30-40%. If you're a US citizen or permanent resident with substantial assets, asset depletion offers better leverage at 20-25% down.
Merced's median price points make asset depletion accessible for buyers with mid-six-figure portfolios. You don't need $2M+ in assets like you might in coastal markets to make the math work on local home prices.
The Central Valley sees strong demand from Bay Area retirees liquidating expensive properties. They arrive with substantial proceeds but no current employment, making asset depletion a natural fit for this demographic shift.
Property types matter. Lenders get cautious on rural parcels or properties requiring well and septic in Merced County. Stick to city limits or established subdivisions for smoother approvals on asset depletion programs.
Checking, savings, money market, stocks, bonds, mutual funds, and retirement accounts count. Real estate equity and business assets typically don't qualify.
For a $400K purchase, expect to show $600K-$800K in liquid assets after accounting for down payment, closing costs, and reserves. Asset requirements scale with purchase price.
Yes, but lenders may apply a 30% penalty haircut if you're under 59½. That $500K 401(k) might only count as $350K toward your qualifying calculation.
Most lenders require 680 minimum. Some go to 660 with 25% down and strong compensating factors like excess reserves or lower debt-to-income ratios.
Typically 3-4 weeks from application to closing. Faster than bank statement loans since there's no income analysis, just asset verification through recent statements.
Some lenders include 2-3 year prepayment penalties, others don't. This varies by lender and affects rate pricing, so clarify upfront before locking.
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.