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Asset Depletion Loans in Gilroy
Gilroy's mix of agricultural heritage and proximity to Silicon Valley creates a unique borrower profile. Many residents hold significant assets in retirement accounts, investment portfolios, or business holdings while drawing minimal traditional income.
Asset depletion loans serve retirees, early retirement candidates, and investors who've accumulated substantial liquid assets. These programs calculate qualifying income by dividing your total assets by the loan term, typically 360 months.
Santa Clara County's competitive real estate market means buyers need flexible qualification options. Asset depletion financing opens doors for those whose net worth far exceeds their W-2 income.
Borrowers typically need $500,000 to several million in verified liquid assets to qualify. Acceptable assets include stocks, bonds, mutual funds, 401(k)s, IRAs, and savings accounts. Real estate equity and business assets generally don't count.
Credit score requirements range from 640 to 700 depending on the lender and down payment amount. Larger down payments—often 20% to 30%—strengthen applications and may lower rate requirements.
Lenders calculate monthly income by dividing total eligible assets by the loan term. A borrower with $1.8 million in assets seeking a 30-year loan would show $5,000 monthly qualifying income from asset depletion alone.
Asset depletion loans fall under non-QM lending, meaning fewer institutions offer them compared to conventional programs. Portfolio lenders and specialty finance companies dominate this space with varying asset calculation methods.
Some lenders count 100% of liquid assets while others apply discounts for retirement account early withdrawal penalties. The calculation methodology significantly impacts your qualifying power, making lender selection critical.
Interest rates typically run 1% to 3% above conventional loan rates. Rates vary by borrower profile and market conditions, with stronger credit scores and larger down payments securing better terms.
The biggest mistake applicants make is waiting until retirement to consider asset depletion financing. Starting the process while still employed allows time to position assets and compare lender methodologies without purchase timeline pressure.
Documentation preparation proves crucial. Lenders require 60-90 days of asset statements showing consistent balances. Recent large deposits trigger questions and potential delays, so plan major account movements carefully.
Working with a broker who regularly places asset depletion loans saves both time and money. We compare calculation methods across lenders to maximize your qualifying income and identify the most competitive rate structures for your situation.
Bank statement loans serve business owners showing revenue through deposits, while asset depletion targets those with accumulated wealth. If you have both business income and substantial assets, comparing both programs often reveals the better qualification path.
DSCR loans work for investment properties using rental income, whereas asset depletion applies to any property type including primary residences. The choice depends on whether you're buying to live or invest.
Some borrowers qualify conventionally but choose asset depletion to avoid depleting liquid reserves for large down payments. The higher rate may cost less than the opportunity cost of liquidating performing investments.
Gilroy's position at the southern edge of Santa Clara County means property values generally run below neighboring cities. This price advantage helps asset depletion borrowers qualify more easily, as lower purchase prices require less qualifying income from asset calculations.
The city's growing appeal to Bay Area retirees seeking lower costs creates steady demand for alternative qualification programs. Many arrive with Silicon Valley nest eggs but limited fixed income, making asset depletion an ideal fit.
Property types in Gilroy range from newer developments to ranch-style homes on larger parcels. Asset depletion loans work for standard residential properties but may face restrictions on agricultural or unique properties requiring specialized underwriting.
Yes. Lenders calculate qualifying income from the account balance without requiring actual withdrawals. The assets remain invested while proving your ability to repay the loan over time.
Typical closing timelines run 30-45 days. Clean asset documentation and responsive communication can sometimes accelerate the process, but allow adequate time for underwriting review.
Only liquid, documentable assets typically qualify. Stocks, bonds, mutual funds, and retirement accounts count. Real estate equity, business ownership, and personal property generally don't.
Lenders verify assets at application and again before closing. Significant declines may affect qualification. Maintaining stable balances and avoiding large withdrawals protects your approval.
Yes. Many lenders allow combining asset depletion income with Social Security, pensions, or rental income. This flexibility often strengthens qualification and may improve loan terms.
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.