Asset Depletion Loans
Asset Depletion Loan Features and Terms
| Feature | Asset Depletion Loans |
|---|---|
| Loan Type | Real estate-secured loan |
| Lien Position | 1st Position |
| Loan Term | 10-30 years |
| Interest Rates | Fixed and Adjustable Rates Available |
| Loan Amount | $100,000 minimum |
| LTV | Up to 75% |
| Credit Score | 600 min |
| Occupancy | Primary residences in California; investment properties nationwide |
| Property Types Allowed | 1-4 unit residential |
| Prepayment Penalty | Flexible |
| Closing Time | 30-45 days |
At Westpark Loans, we know that income isn’t the complete story of someone’s finances. Trying to finance a piece of property is difficult enough without needing to show that you actually have the income to afford it. That’s why we offer Asset Depletion Loans that take into account your entire financial situation. If you’re looking to finance a piece of property in California, Westpark Loans is here to help you get the process started in whichever way works best for you and your finances.
What is an Asset Depletion Loan?
Asset depletion loans allow borrowers to qualify for a mortgage based on their liquid assets rather than their income. This method involves calculating a portion of the borrower’s assets and converting them into a qualifying income stream, making it easier for individuals with significant assets but limited income to secure financing.
These loans are ideal for retirees, investors, or high-net-worth borrowers whose assets generate income or liquidity, even if the taxable income is limited.
Asset Depletion Loan Features and Benefits
Non-Retired and Retired Borrowers Eligible: Asset Depletion Loans cater to both non-retired and retired individuals, offering flexibility in qualification criteria.
Combine with Other Income Sources: Borrowers can couple asset depletion income with other forms of income, such as W-2 wages, social security, pensions, stock market account, retirement income, and self-employment income, to qualify for a loan.
High Loan-to-Value Ratios: With a 75% maximum loan-to-value ratio (LTV), borrowers can access substantial financing based on their assets.
Flexible Debt-to-Income Ratios: Asset Depletion Loans allow up to a 50% debt-to-income ratio, providing more flexibility in qualification.
Who Would Benefit from an Asset Depletion Loan?
Freelancers: Freelancers with variable income streams can use alternative documentation loans to finance property purchases, leveraging non-traditional income verification methods. You don’t need a more traditional income source in order to finance the property you want.
Gig Economy Workers: Individuals working in the gig economy can access financing through alternative documentation loans, bypassing the need for traditional employment verification.
Real Estate Investors: Investors with fluctuating income can use assets to qualify for property financing. Assets are used to verify income, making it easier for investors to secure loans.
Small Business Owners: Business owners with inconsistent revenue can benefit from asset loans. Using business assets, they can qualify for property loans and expand their portfolios.
Self-Employed Borrowers: Self-employed individuals can leverage asset loans to secure financing. Providing assets instead of traditional income documentation allows them to invest in real estate. This means your self-employed status won’t get in the way of financing the home or workspace that you need.
Asset Depletion Loan Example
Lisa and Mark, a retired couple with substantial assets but limited regular income, wanted to purchase a luxury condo in San Francisco. They approached Westpark Loans for an Asset Depletion Loan.
Property Details:
- Location: San Francisco, California
- Purchase Price: $2,000,000
Loan Details:
- Loan Amount: $1,500,000 (75% LTV)
- Loan Term: 30 years
- Interest Rate: Fixed
- Assets Used: Liquid assets converted to qualifying income by dividing by 60 months.
Westpark Loans approved the Asset Depletion Loan in 30 days, allowing Lisa and Mark to purchase their dream condo without the need for traditional income verification.
Frequently Asked Questions
Both retired and non-retired borrowers with significant assets are eligible
Assets like savings, investments, and retirement accounts can be used. Income is calculated by dividing the total assets by 60.
Yes, you can combine it with other income such as wages, pensions, or self-employment income.
The maximum loan-to-value ratio is typically 75%.
Yes, these loans can be used for both primary residences and investment properties.
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