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Asset Depletion Loans in Carmel-by-the-Sea
Carmel By The Sea attracts retirees and high-net-worth buyers who hold wealth in portfolios, not paychecks. Asset depletion loans let you qualify using liquid assets instead of W-2 income.
This coastal enclave sees many cash-heavy buyers who don't need a mortgage — but leveraging assets while preserving liquidity often makes more financial sense. Asset depletion programs bridge that gap.
Most borrowers here are past traditional employment or run businesses structured to minimize taxable income. Showing $2 million in assets works better than explaining why last year's tax return shows $40,000.
Lenders divide your total liquid assets by 360 months to calculate qualifying income. If you have $1.8 million in stocks and bonds, that's $5,000 monthly qualifying income.
You need substantial reserves beyond the down payment. Most programs require 12-24 months of full housing payments left in accounts after closing.
Credit matters more than with traditional loans. Expect minimum 680 FICO, though some lenders go to 660. You're proving financial stability through assets, not income consistency.
Down payment starts at 20% for primary residences. Investment properties or weaker credit profiles push that to 30-35%.
Asset depletion sits in the Non-QM space, so you won't find it at Wells Fargo or Chase. Specialized lenders dominate this product, and rates vary widely based on how they calculate risk.
Some lenders count only stocks and bonds. Others include retirement accounts at discounted rates — maybe 70% of the balance. A few will consider real estate equity, though that's rare.
We compare programs across 15-20 lenders who offer asset depletion. One might hit 6.5% with full retirement account credit. Another charges 7.25% but only needs 15% down.
The biggest difference isn't rate — it's asset calculation methodology. Getting assets counted at full value versus 60% changes your loan amount by hundreds of thousands.
I close asset depletion loans in Carmel monthly. The profile is almost always the same: 60+ years old, $3-5 million net worth, $80,000 on last year's tax return.
Biggest mistake is waiting until retirement to explore this. If you're still working but asset-rich, conventional financing at 6.5% beats asset depletion at 7.5%. Time the transition carefully.
Second mistake: not consolidating accounts before applying. Six different brokerage accounts with $300K each is harder to document than two accounts with $900K. Streamline 60 days before you apply.
This loan works brilliantly for second homes in Carmel where you don't want to liquidate portfolios. The tax cost of selling $1 million in appreciated stock often exceeds five years of mortgage interest.
Bank statement loans are the alternative if you have business income. They analyze 12-24 months of deposits instead of assets. Rates run similar, but you need ongoing cash flow.
Foreign national programs work for international buyers but require 30-40% down and charge higher rates. Asset depletion at 25% down often costs less for non-citizens with US accounts.
DSCR loans only work for investment properties using rental income. If you're buying a primary or second home in Carmel, asset depletion is the right tool.
Conventional loans beat everything if you qualify — we always check that first. But showing $120,000 annual income from a $3 million portfolio is cleaner than explaining complex trust distributions.
Carmel properties skew expensive for their size. A 1,400 square foot cottage hits $2-3 million easily. That means you need $3-4 million in assets to qualify comfortably with 20% down.
The city attracts buyers who value location over square footage. Asset depletion works well here because property taxes and insurance stay reasonable relative to loan amount — your qualifying ratios pencil easier.
Many buyers hold Pebble Beach Company stock or tech equity from Peninsula careers. These count as long as they're publicly traded or have recent third-party valuations.
Coastal properties here carry higher insurance costs post-wildfires. Make sure your asset calculation leaves room for $8,000-15,000 annual premiums that weren't typical five years ago.
Stocks, bonds, mutual funds, and money market accounts count at full value with most lenders. Retirement accounts count at 60-100% depending on the program and your age.
Yes, second homes qualify but expect 25-30% down payment and slightly higher rates than primary residences. You still need 12+ months reserves after closing.
Plan 25-35 days from application to closing. Documentation is simpler than income verification, but lenders carefully audit account statements and asset valuations.
No, you only liquidate enough for down payment and closing costs. The remaining assets stay invested — lenders just verify the balance exists.
Most lenders accept trust-held assets with proper documentation. LLC-owned assets work if you own 100% and can provide operating agreements and valuations.
Asset depletion rates run 1-2% higher than conventional. Rates vary by borrower profile and market conditions, typically 7-8.5% in current environment versus 6.5-7% 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.