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Asset Depletion Loans in Folsom
Folsom attracts retirees, early retirees, and investors with substantial savings who lack traditional W-2 income. Asset depletion loans let these borrowers qualify based on their bank accounts, investment portfolios, and retirement assets.
Sacramento County's diverse housing stock makes Folsom appealing to buyers transitioning from high-income careers to asset-rich, income-light situations. This loan type bridges the gap between your financial reality and conventional lending requirements.
Many Folsom buyers have built wealth through stock options, business sales, or real estate holdings. Asset depletion programs convert these liquid assets into qualifying income, opening doors that traditional mortgages keep closed.
Lenders typically divide your total liquid assets by 360 months to create a monthly income figure. A borrower with $1 million in verified assets would show $2,778 monthly qualifying income under this calculation method.
Most programs require minimum credit scores between 620-700, depending on asset levels and down payment. Higher asset balances often compensate for lower credit scores or larger loan amounts.
Eligible assets include checking accounts, savings accounts, stocks, bonds, mutual funds, and vested retirement accounts. Some lenders exclude illiquid holdings like real estate equity or unvested stock options.
Down payments generally start at 20-30% for primary residences in Folsom. Investment properties may require 30-40% down, with rates varying by borrower profile and market conditions.
Asset depletion loans come exclusively from non-QM lenders, not traditional banks or credit unions. These specialized lenders understand that net worth matters more than paystubs for certain qualified borrowers.
Different lenders calculate asset depletion differently. Some use 360-month amortization, others use 240 or 120 months. The calculation method dramatically affects your qualifying power and available loan amounts.
Documentation requirements vary widely between lenders. Expect to provide 60-90 days of asset statements showing consistent balances. Some lenders require third-party verification of retirement accounts and brokerage holdings.
Processing timelines typically run 30-45 days for Folsom properties. The asset verification process adds time compared to conventional loans but moves faster than full financial statement programs.
Many Folsom buyers underestimate how much their assets can qualify them for. A couple with $800,000 in liquid assets can often secure $300,000-400,000 in mortgage financing, even with zero employment income.
Timing matters with these programs. Asset balances get averaged over statement periods, so recent large deposits may require explanation letters. Plan your application when account balances reflect stable, established patterns.
Retirement account withdrawals create tax implications that many borrowers overlook. The asset depletion calculation doesn't require actual withdrawals, but understanding potential tax consequences helps with long-term planning.
Combining asset sources strengthens applications. Borrowers who show $400,000 in retirement accounts plus $300,000 in brokerage accounts present better than those with $700,000 in a single account type.
Bank statement loans suit self-employed borrowers with irregular deposits, while asset depletion serves those with minimal income but substantial savings. Folsom retirees typically benefit more from asset depletion programs.
DSCR loans work for investment properties using rental income, but asset depletion handles both primary residences and investment properties. The choice depends on whether you have rental income or just liquid assets.
Foreign national loans often overlap with asset depletion for international buyers in Folsom. Some borrowers qualify under both programs, with the better option depending on asset location and documentation ease.
1099 contractor loans require active income documentation, while asset depletion eliminates income verification entirely. Borrowers transitioning from 1099 work to retirement often switch between these programs.
Folsom's proximity to Sacramento provides access to multiple non-QM lenders without limiting options to local institutions. This geographic advantage creates competitive pricing for asset-based programs.
Sacramento County property taxes average 1.1-1.3% of assessed value, factoring into qualification calculations. Lenders include these obligations when determining whether asset levels support total housing payments.
Folsom's master-planned communities and established neighborhoods both qualify for asset depletion financing. Lenders focus on borrower assets rather than specific property types or locations within the city.
The absence of Mello-Roos taxes in some Folsom areas reduces total housing costs, improving qualification ratios. Understanding these local tax structures helps maximize your borrowing capacity under asset depletion formulas.
Most lenders require minimum assets of $500,000-$1,000,000, though requirements vary by loan amount and property type. Your total assets divided by 360 months creates your qualifying income figure.
Yes, vested retirement accounts typically qualify at 70% of their value to account for potential tax implications. Some lenders use different percentages based on account type and withdrawal rules.
Rates typically run 1-3% higher than conventional conforming loans. Exact rates vary by borrower profile, down payment size, and market conditions at time of application.
Lenders verify assets at application and again before closing. Significant decreases may require explanation or additional documentation. Maintain stable balances throughout your loan process when possible.
Yes, most lenders allow combining asset depletion income with Social Security, pensions, or rental income. This combination often improves your total qualifying power and available loan amounts.
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.