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Asset Depletion Loans in Capitola
Capitola's coastal real estate attracts retirees, investors, and entrepreneurs with significant assets but irregular W-2 income. Asset depletion loans let you qualify using your investment accounts instead of traditional employment verification.
In Santa Cruz County's $1M+ market, many borrowers have the wealth to buy but lack conventional income documentation. This program converts your liquid assets into qualifying income, opening doors that traditional underwriting keeps closed.
You need substantial liquid assets—typically $500k minimum after down payment and reserves. Lenders divide your asset total by 360 months to calculate qualifying income, though some use shorter timeframes for larger portfolios.
Credit requirements start at 680, with most competitive rates at 720+. You'll still need 20-25% down for primary residences, 25-30% for second homes or investment properties in Capitola.
Asset depletion sits in the non-QM space, so your neighborhood credit union won't offer it. We work with specialty lenders who underwrite these deals daily and understand coastal California pricing.
Rate spreads vary dramatically between lenders—sometimes 100+ basis points for identical scenarios. Shopping across our 200+ wholesale partners typically saves borrowers $40k-$80k over a seven-year hold period on a $1.5M loan.
Most borrowers who consider asset depletion actually qualify for bank statement loans with better pricing. We only recommend asset depletion when you're fully retired or your business runs through entities that make bank statements messy.
The calculation method matters enormously. Some lenders use 84-month depletion schedules for large portfolios, doubling your qualifying income versus standard 360-month formulas. That difference determines whether you hit debt-to-income requirements on a $2M Capitola property.
Bank statement loans require 12-24 months of statements but often deliver lower rates. If you have business income flowing through personal accounts, that route typically wins. Asset depletion makes sense when you're living off investments without regular deposits.
DSCR loans work better for pure investment properties where rental income covers the payment. Asset depletion shines for second homes or primary residences where you have wealth but no traditional income documentation.
Capitola's beach properties attract significant retiree and second-home demand, making asset depletion more common here than inland markets. Lenders understand the village's appeal to high-net-worth buyers without traditional employment.
Santa Cruz County property taxes run 1.1-1.2%, and coastal insurance has climbed 40-60% since 2020. Your asset calculation needs to account for these carrying costs—we factor $4k-$6k monthly on a $2M property when stress-testing your reserves.
Stocks, bonds, mutual funds, and most retirement accounts qualify. Real estate equity and business assets typically don't count toward the calculation.
No, you're not liquidating assets—just using them to calculate income. The assets remain in your accounts and continue growing or generating returns.
Most lenders cap loans at $3-4M. Your qualifying amount depends on total assets, credit score, and property type—typically 40-45% debt-to-income using calculated asset income.
Yes, expect 1.5-2.5% above conventional rates. However, rates vary significantly between lenders—shopping saves 0.5-1% on identical scenarios.
Yes, but DSCR loans usually price better for rentals. Asset depletion makes more sense for second homes or primary residences where you lack traditional income.
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.