Asset-utilization loans are important for a wide variety of borrowers. This article will explain the details and describe some of the reasons why you may benefit from the program.
Borrowers, like people, don’t fit into neatly organized categories. They don’t always conform to the neat boxes and fields required by traditional lending. For example, some don’t have a typical income, such as a paycheck from a steady career.
Many borrowers are not employees, but investors, retirees, self-employed professionals, and entrepreneurs. These financially-strong people may not have a typical income, but instead live off of asset, accounts, and investments.
With asset utilization, which uses your accounts and properties to qualify, you can secure a top-quality loan even if you have a unique income. You can use the loans to form the entirety of your documented income, or it can be used to supplement your income, whichever works best for your unique situation.
These programs are not new and, to be honest, they are not hard to find. However, the rates on these loans can be expensive, especially if you have a large-sum loan. With this program, you can take advantage of a specific option that provides qualified applicants with lower interest rates compared to many other asset-utilization loans.
Who Should Consider Using these Asset-Based Loans?
These loans are ideal for all types of people, but some borrowers will find them more useful than others. Recent retirees are typical users, as they potentially have millions in assets yet do not have a regular income.
In fact, anyone with a significant base of asset but an irregular income will find these loans useful. This includes investors, commission-based sales representatives, and business owners.
Users can also include anyone who inherited a major amount and wants to use this property to enhance a loan.
These loans offer amount that many other mortgages can’t match. (Up to $10 million.) For this reason, they are also good options for anyone who has significant assets and needs to qualify for a larger loan.
Individuals who hold much of their net worth in cryptocurrency can use these loans as well. This is generally not represented in the mortgage industry, so we are proud to offer this as an option.
Highlights of Our Asset-Utilization Loans
Can Be Used as Additional Income to Qualify
One of the best uses for this program is that it allows you to increase the listed income on your application. Basically, your assets can be added to your regular income, significantly increasing your borrowing potential.
Can Be Only Income As Well
If needed, the assets can form the entirety of your income. For this program, the assets can be the only income listed, which is a benefit to retirees and other individuals who have little or no income yet hold assets worth millions of dollars.
Loan Amounts as High as $10 Million
Perhaps you need a larger loan. In the state of California, housing prices can be extremely high, and you need to make competitive offers just to be considered by the seller. With these loans, qualifying buyers can get up financing up to $10 million, which creates new options when you need a high-quality loan.
Interest-Only Loans Available
Borrowers who want a low monthly payment, at least at the beginning of the mortgage, will be able to use this asset program as an interest-only loan. For an initial period (which can vary), you’ll only pay a small amount on the loan, freeing other capital for investments and other expenses.
Flexibility With Recent Credit Events
We understand that people make mistakes. A few past issues with your credit should not keep you from getting the mortgage loan you need. With this program, you can have recent credit events on your credit history and still be eligible. Talk to our team about details on past credit issues.
Lenient Credit Score Requirements
If you have fair credit, but not an extremely high score, you can still utilize these loans. This program allows borrowers to have credit scores as low as 620, creating new opportunities for many California buyers.
Using Asset Depletion: The Details
These loans are structured into different tiers that depend on how much of a downpayment you bring to the purchase.
20% Down
If you have a loan-to-value ratio of 80%, which means a 20% downpayment, you will have to have two-times the loan amount in qualified assets after the downpayment, closing costs, and required reserves.
30% Down
For borrowers who have a 30% downpayment (70% loan-to-value), the requirements are reduced. In this case, you will need to have 1.5-times the loan amount in qualified assets after the upfront costs.
Regardless of your downpayment, the assets being used for reserves cannot be used for asset depletion. Also, property for asset depletion cannot be used for other income sources.
Important Information and Resources for Our-Asset-Based Program
With these loans, you can purchase a variety of different properties. While they do not allow you to purchase an investment property, they can be used to purchase a second home. Of course, you can also buy your primary residence with this mortgage.
Single-family homes are not the only option. They can also be used for the purchase on a townhouse, condo, and PUD properties are also eligible. For condos, we have included low-, mid-, and high-rise units, as well as non-warrantable condo units.
Get the Asset-Utilization Loan for Your California Home Purchase
We are proud to serve the great state of California! As one of the top offices for asset-utilization loans, we would love to help you secure the affordable mortgage you deserve.
Contact our team to learn more about the benefits of asset-utilization loans today!
