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Asset Depletion Loans in Coronado
Coronado attracts retirees, entrepreneurs, and military families with substantial savings but non-traditional income. Asset depletion loans let you qualify for a mortgage using your investment accounts, retirement funds, or liquid assets instead of W-2 income.
This loan program calculates your qualifying income by dividing your total liquid assets by 360 months. For example, $1.8 million in assets could generate $5,000 monthly qualifying income, making it ideal for those with wealth but limited paystub documentation.
The island community's premium real estate values align well with asset-based financing. Many Coronado buyers prefer this approach over depleting their portfolios or converting investments to make traditional income requirements.
Lenders typically require $500,000 to several million in verifiable liquid assets. Acceptable assets include checking accounts, savings, stocks, bonds, mutual funds, and certain retirement accounts like IRAs and 401(k)s.
Credit scores usually need to be 680 or higher, though some programs accept 660 with compensating factors. Down payments often start at 20-30%, depending on the property type and total loan amount.
The asset calculation excludes your down payment and closing costs. Only the remaining balance counts toward your qualifying income, so you'll need substantial reserves beyond your purchase funds.
Asset depletion loans fall under the Non-QM category, meaning they're portfolio products held by private lenders rather than sold to Fannie Mae or Freddie Mac. This gives lenders flexibility but requires finding the right financing partner.
Not all mortgage companies offer asset depletion programs. You'll need to work with lenders who specialize in Non-QM lending and understand how to structure these transactions properly.
Interest rates typically run 0.5-2% higher than conventional loans due to the specialized underwriting and portfolio retention. Rates vary by borrower profile and market conditions, with stronger credit and larger down payments securing better pricing.
Asset depletion works exceptionally well for military retirees settling in Coronado with pension and investment income that doesn't show on tax returns. The program counts your full asset base without penalizing you for conservative income strategies.
Documentation requirements are straightforward but specific. Expect to provide two months of statements for all accounts being counted, plus verification that retirement accounts are accessible without penalties if you're under 59½.
Consider this strategy if you're selling a business, received an inheritance, or have substantial investments generating minimal taxable income. Asset depletion often qualifies you for larger loan amounts than reporting your actual distributions would.
Bank statement loans offer an alternative for business owners who can document income through deposits, typically requiring 12-24 months of statements. Asset depletion eliminates the need to show any income flow if your savings are sufficient.
Foreign national loans serve international buyers but require larger down payments and different documentation. Asset depletion may work better for U.S. citizens or residents with domestic accounts and established credit.
DSCR loans focus on rental property cash flow rather than borrower income. If you're buying a primary residence in Coronado, asset depletion provides more flexibility than investment-focused programs.
Coronado's unique island geography limits housing inventory, creating sustained property values that lenders view favorably. The stable market conditions support asset depletion lending even at higher loan amounts.
Many Coronado buyers are relocating from other states or downsizing from larger properties. Asset depletion accommodates these transitions when traditional employment income doesn't reflect your financial capacity.
The community's concentration of retirees and military personnel makes local mortgage professionals familiar with alternative documentation programs. Finding experienced guidance for asset-based financing is easier here than in many California markets.
Checking, savings, stocks, bonds, mutual funds, and accessible retirement accounts like IRAs qualify. Your primary residence equity and assets earmarked for down payment don't count toward the calculation.
Requirements vary by property price, but expect to need $500,000 to several million in liquid assets after your down payment and reserves. The calculation divides your total by 360 months to determine monthly qualifying income.
Yes, if you're over 59½ or can access funds without early withdrawal penalties. Lenders require documentation showing the account balance and your ability to withdraw funds if needed for loan payments.
Asset depletion loans typically carry rates 0.5-2% higher than conventional programs. Rates vary by borrower profile and market conditions, with better pricing for higher credit scores and larger down payments.
No, the calculation only determines your qualifying income. You don't actually deplete your assets or make withdrawals. The program simply uses your portfolio value to establish repayment ability instead of paystubs.
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.