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Asset Depletion Loans in Cotati
Cotati's housing market attracts retirees, entrepreneurs, and high-net-worth individuals who hold significant assets but lack traditional employment income. Asset depletion loans enable these borrowers to qualify using investment accounts, retirement funds, and liquid savings.
This non-QM financing option works particularly well in Sonoma County, where many residents have built substantial wealth through tech careers, wine industry success, or real estate investments. Your portfolio becomes your income proof.
Lenders calculate qualifying income by dividing your total liquid assets by a set number of months, typically 360 for a 30-year loan. This approach recognizes that asset-rich borrowers can reliably make mortgage payments without traditional paychecks.
Borrowers need substantial liquid assets to qualify for asset depletion loans in Cotati. Most programs require minimum asset balances between $500,000 and $2 million, depending on the loan amount and property value.
Credit scores typically need to reach 680 or higher, though some lenders accept scores as low as 660 with larger down payments. Expect to put down 20-30% on primary residences and 25-35% on investment properties.
Acceptable assets include checking and savings accounts, stocks, bonds, mutual funds, and retirement accounts like 401(k)s and IRAs. Each lender applies different percentages when calculating qualifying income from these sources.
Asset depletion loans fall under non-QM lending, meaning fewer lenders offer these programs compared to conventional mortgages. Specialized mortgage brokers maintain relationships with portfolio lenders and private institutions that provide this financing.
Each lender uses different asset depletion formulas and percentage calculations. Some discount retirement account values by 30-40% since early withdrawals trigger penalties. Others count 100% of liquid non-retirement assets but only 70% of IRAs and 401(k)s.
Rates vary by borrower profile and market conditions. Asset depletion loans typically carry interest rates 0.5-2% higher than conventional mortgages due to their specialized nature and portfolio lending status.
Working with an experienced broker proves essential for asset depletion financing. We shop multiple lenders simultaneously to find the calculation method that maximizes your qualifying amount while securing competitive terms.
Documentation requirements vary significantly between lenders. Most want 2-3 months of asset statements, but some accept single-month snapshots if balances remain stable. We guide clients on timing account statements to show optimal balances.
Cotati borrowers often combine asset depletion with other qualification methods. If you have partial income from consulting or dividends, hybrid programs may deliver better rates than pure asset depletion approaches.
Asset depletion loans differ from bank statement loans, which qualify borrowers based on business deposits rather than investment portfolios. Bank statement programs suit active business owners, while asset depletion works for asset-rich individuals without operating businesses.
Compared to DSCR loans focused on rental property cash flow, asset depletion offers more flexibility for primary residences and vacation homes. DSCR programs require properties to generate rental income, while asset depletion relies solely on your financial reserves.
Foreign national loans serve non-U.S. citizens, often using asset depletion as one qualifying component. If you're a U.S. citizen or permanent resident with substantial assets, standard asset depletion programs typically provide better rates than foreign national options.
Cotati's proximity to Santa Rosa and Petaluma creates demand from Bay Area professionals who've accumulated significant retirement savings. Many seek smaller homes in quieter communities while maintaining large investment portfolios.
Sonoma County's wine country appeal attracts second-home buyers and retirees from high-cost areas. Asset depletion financing enables these buyers to purchase without liquidating long-term investments or disrupting retirement income strategies.
Property values in Cotati remain lower than coastal Sonoma County markets, meaning asset requirements stay more accessible. Buyers with $750,000-$1.5 million in liquid assets can often qualify for local home purchases using asset depletion methods.
Most lenders count 60-70% of IRA and 401(k) balances for borrowers under age 59½ due to early withdrawal penalties. After 59½, many lenders use 80-100% of retirement account values in their calculations.
Yes, stocks and mutual funds qualify as assets. Lenders typically use the lowest balance from the most recent 2-3 months of statements to account for market volatility and ensure stable qualification amounts.
Expect 30-45 days from application to closing. The process takes longer than conventional loans due to detailed asset verification and specialized underwriting, but experienced brokers can streamline documentation requirements.
No. Asset depletion loans use your portfolio value to calculate qualifying income without requiring actual liquidation. You maintain your investments while the lender counts them as proof of repayment ability.
Most programs need 20-30% down for primary residences in Cotati. Investment properties and second homes typically require 25-35% down. Larger down payments may unlock better rates and higher loan amounts.
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.