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Asset Depletion Loans in Los Gatos
Los Gatos attracts successful entrepreneurs, tech executives, and retirees with substantial investment portfolios but non-traditional income documentation. Asset depletion loans allow these qualified buyers to leverage liquid assets for mortgage qualification.
This financing approach works particularly well in Santa Clara County's luxury market, where many buyers hold significant wealth in stocks, bonds, retirement accounts, or business equity rather than W-2 income.
Lenders calculate your qualifying income by dividing liquid assets by the loan term, typically 360 months. A borrower with $2 million in qualifying assets could show approximately $5,555 monthly income for qualification purposes.
Acceptable assets include stocks, bonds, mutual funds, retirement accounts, and other verifiable liquid holdings. Real estate equity and business assets typically require separate evaluation. Credit scores usually need to be 680 or higher, though requirements vary by lender.
Most programs require 20-30% down payment. The asset calculation excludes your down payment and reserves, ensuring sufficient liquidity remains after closing.
Asset depletion loans fall under non-QM lending, meaning fewer institutions offer these programs compared to conventional mortgages. Portfolio lenders and specialized non-QM lenders dominate this space, each with unique asset calculation methods.
Some lenders accept 70% of retirement account values, while others use full balances for non-retirement assets. Understanding these nuances significantly impacts your qualifying power and loan amount potential.
Rates vary by borrower profile and market conditions. Expect pricing typically 0.5-2% higher than conforming loans, reflecting the specialized underwriting and portfolio risk.
Many Los Gatos borrowers unnecessarily believe they can't qualify due to business write-offs or stock-heavy compensation. Asset depletion bypasses tax return analysis entirely, focusing solely on verifiable liquid holdings.
Timing matters when documenting assets. Market volatility can affect account balances, so coordinate your application when portfolios reflect stable or strong valuations. Most lenders average 2-3 months of statements to determine qualifying amounts.
Consider this option if you're recently retired, between business ventures, or receive compensation primarily through equity. The underwriting timeline typically runs 30-45 days due to specialized asset verification requirements.
Bank statement loans work better for business owners with consistent deposits but high write-offs. Asset depletion suits borrowers with substantial savings but minimal cash flow documentation.
Foreign national loans serve non-U.S. citizens, while DSCR loans focus on investment property rental income. If you're self-employed with strong 1099 income, those programs might offer better terms than asset depletion.
The right choice depends on your asset composition and financial profile. Borrowers with $1 million+ in liquid assets often find asset depletion the cleanest path to approval in Los Gatos's competitive market.
Los Gatos real estate commands premium pricing, with properties frequently exceeding conforming loan limits. Asset depletion programs accommodate jumbo loan amounts, making them practical for this market's price points.
Santa Clara County's concentration of tech wealth creates natural demand for asset-based lending. Many local buyers hold RSUs, stock options, or cryptocurrency requiring specialized qualification approaches.
Property types matter. Lenders typically approve single-family homes, condos, and townhomes more readily than unique properties. Los Gatos's mix of historic homes and modern estates generally qualifies, though condition and marketability factor into approval.
Stocks, bonds, mutual funds, retirement accounts, and savings qualify. Most lenders use 100% of non-retirement assets and 70% of retirement accounts. Your down payment and required reserves don't count toward qualifying assets.
Requirements vary by purchase price and loan amount. For a typical calculation, multiply your target monthly payment by 360, then add your down payment and reserves to estimate total assets needed.
Yes, though most programs focus on primary residences and second homes. Investment properties typically require larger down payments and may have stricter asset requirements.
Rates vary by borrower profile and market conditions but typically run 0.5-2% higher than conventional loans. Strong credit scores and larger down payments help secure better pricing.
Most lenders require 680 minimum, though some programs accept 660 with compensating factors. Higher scores above 720 generally unlock better rates and 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.