Loading
Asset Depletion Loans in East Palo Alto
East Palo Alto's position in San Mateo County attracts entrepreneurs, tech professionals with equity compensation, and retirees with substantial portfolios. Asset depletion loans serve borrowers whose wealth sits in investment accounts rather than traditional paychecks.
This financing approach calculates qualifying income by dividing your liquid assets by the loan term, making it ideal for those who've accumulated wealth but show limited W-2 income. The program recognizes that account balances often tell a more accurate financial story than pay stubs.
Lenders typically divide your qualifying assets by 360 months (30-year term) or 180 months (15-year term) to create a monthly income figure. Stocks, bonds, mutual funds, and retirement accounts generally qualify, while real estate equity usually doesn't count.
Most programs require substantial assets—often $500,000 or more in liquid holdings—and look for credit scores above 680. You'll need documentation proving account ownership and value, typically through recent investment statements.
Down payment requirements typically start at 20-30% for primary residences. Borrowers must demonstrate the asset base remains strong after accounting for the down payment and closing costs.
Asset depletion programs come from non-QM lenders who specialize in alternative documentation. These aren't available through standard Fannie Mae or Freddie Mac channels, which means fewer lenders and more variation in program requirements.
Rates vary by borrower profile and market conditions but typically run 1-2% higher than conventional mortgages. The premium reflects the specialized underwriting and portfolio-based lending model rather than any actual increased risk for well-qualified borrowers.
Working with a broker proves particularly valuable here since these programs vary significantly between lenders. One might count IRA balances at 70% of value while another accepts 100%, creating meaningful differences in qualifying power.
Many East Palo Alto buyers don't realize they qualify for asset depletion until a broker reviews their complete financial picture. Someone with $2 million in investments dividing by 360 months creates $5,555 monthly qualifying income—often enough for substantial purchasing power.
The key strategy involves timing: take this loan when you have assets but limited income, then refinance to conventional terms once your income documentation improves. This approach gets you into the property without waiting years to show traditional income patterns.
Don't liquidate investments to force a conventional approval. Asset depletion preserves your portfolio's growth potential while still securing financing. The slightly higher rate often costs less than the opportunity cost of selling appreciated assets.
Bank statement loans serve self-employed borrowers with business income, while asset depletion works for those with investment wealth. If you have both business revenue and substantial assets, comparing these programs side-by-side often reveals the better qualification path.
Foreign national loans require asset depletion in many cases since overseas income proves difficult to document. DSCR loans focus on rental property cash flow, making them the choice for investors who want the property itself to qualify rather than personal assets.
The right program depends on your asset composition and property type. Investment properties might work better under DSCR terms, while primary residences with strong portfolios behind them suit asset depletion perfectly.
East Palo Alto's proximity to major tech employers creates a borrower pool perfectly suited for asset depletion. Stock options, RSUs, and startup equity generate wealth that doesn't appear on tax returns until years after vesting.
San Mateo County's property values mean substantial asset bases become necessary regardless of loan type. Borrowers here often meet asset minimums naturally through existing investment portfolios built during their careers.
The city's evolving housing stock includes everything from single-family homes to newer developments. Asset depletion works across all property types, though lenders may adjust requirements based on the specific property category.
Most lenders require $500,000 to $1 million in qualifying liquid assets, though amounts vary by property price and loan size. The calculation divides your assets by 360 months to create qualifying income.
Yes, IRA and 401(k) balances typically qualify, though lenders may apply a discount factor of 60-70% to account for taxes and early withdrawal penalties. The exact treatment varies between lenders.
Rates vary by borrower profile and market conditions but typically run 1-2 percentage points above conventional mortgages. Strong credit scores and larger down payments help secure better pricing.
No, lenders calculate qualifying income based on asset balances without requiring liquidation. You'll need sufficient liquid funds for down payment and reserves, but your portfolio remains invested.
Absolutely—many borrowers use asset depletion as bridge financing, then refinance to conventional terms once they can document traditional income. This strategy provides immediate purchasing power while minimizing long-term costs.
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.