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Asset Depletion Loans in Daly City
Daly City homebuyers with substantial savings but non-traditional income often struggle with conventional mortgage requirements. Asset depletion loans solve this problem by letting you qualify based on your liquid assets instead of W-2 income.
This financing option works particularly well for retirees, investors, and entrepreneurs in San Mateo County who have built significant wealth but don't fit traditional employment boxes. Your bank and investment accounts become your income qualification.
Asset depletion loans give Daly City buyers access to competitive rates without proving steady employment. Lenders calculate a monthly income figure by dividing your liquid assets by a set number of months, typically 60 to 360 months depending on the program.
Most asset depletion programs in Daly City require liquid assets of at least $500,000 to $1 million after your down payment. Acceptable assets include stocks, bonds, mutual funds, retirement accounts, and cash savings.
Credit score requirements typically start at 680, though some lenders accept scores as low as 620 with larger down payments. You'll need 20% to 30% down for most properties in San Mateo County.
Lenders divide your total liquid assets by a specific term to create a monthly income figure. This calculated income must cover your mortgage payment and other debt obligations with adequate debt-to-income ratios.
Asset depletion loans fall under non-QM financing, meaning fewer lenders offer these programs compared to conventional mortgages. Working with a broker who specializes in alternative documentation loans saves time and expands your options in Daly City.
Different lenders use varying formulas to calculate asset-based income. Some divide your assets by 60 months, others by 120 or 360 months. The calculation method dramatically affects your qualifying power and should be compared across multiple lenders.
Rates vary by borrower profile and market conditions, but asset depletion loans typically price 1% to 2% higher than conventional mortgages. The trade-off is qualification flexibility that traditional programs can't match.
The biggest mistake Daly City buyers make is liquidating assets to show income instead of using asset depletion loans. This creates unnecessary tax events and depletes the very reserves lenders want to see.
Post-retirement homebuyers in San Mateo County often overlook this option because they assume no paycheck means no mortgage. Asset depletion loans specifically serve people who have accumulated wealth but stopped traditional employment.
Documentation requirements are simpler than you might expect. Most lenders need only account statements showing asset balances and a reasonable explanation of where the money came from. No tax returns or employment letters required.
Bank statement loans and asset depletion loans both serve self-employed borrowers, but they work differently. Bank statement programs analyze deposit patterns, while asset depletion focuses purely on account balances.
If you have consistent business deposits, bank statement loans might offer better rates. If your income is sporadic but you have substantial savings, asset depletion usually provides stronger qualifying power in Daly City.
DSCR loans work for investment properties based on rental income, while asset depletion handles both primary residences and investments. Foreign national loans serve non-citizens, but asset depletion works for anyone with sufficient liquid assets regardless of citizenship status.
Daly City's proximity to San Francisco means many residents are tech professionals, early retirees, or real estate investors with substantial assets but non-traditional income structures. Asset depletion loans align perfectly with this demographic.
San Mateo County property values create a natural fit for asset depletion programs since the minimum asset requirements match the down payment needs for local homes. A buyer with $800,000 in liquid assets can qualify and close.
The diverse homebuyer pool in Daly City includes international buyers and retirees relocating from the Bay Area. Asset depletion programs accommodate both groups without the employment verification that creates barriers.
Most lenders accept stocks, bonds, mutual funds, 401(k)s, IRAs, and cash savings. Some programs include vested stock options. Real estate equity and physical assets typically don't qualify for asset depletion calculations.
Lenders divide your total liquid assets by a specific number of months, usually 60 to 360 months depending on the program. This creates a monthly income figure used to qualify you for the mortgage amount.
Yes, asset depletion loans work for investment properties and second homes in addition to primary residences. Requirements and rates may vary slightly based on property use and occupancy type.
No, you don't liquidate assets to qualify. Lenders verify balances through statements but the money stays invested. You only need liquid assets for your down payment and reserves as you would with any mortgage.
Most programs require 680 minimum credit score, though some lenders accept 620 with larger down payments. Higher credit scores unlock better rates and terms across all asset depletion programs.
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.