For most people, using traditional income documents, such as paystubs and tax returns, is the best (and possibly the only) way to qualify for a loan. But for others, these documents are either incomplete or simply don’t exist. Asset utilization, therefore, may be required to qualify for a mortgage loan.
Some people simply don’t have regular paystubs; they may be business owners or earn an irregular income. Some people’s tax returns don’t give a clear description of their entire net worth. There can be numerous problems for countless people using paystubs and tax returns, so some turn to their assets.
Asset utilization allows borrowers with a non-typical income to qualify for mortgages, adding to or in some cases completely creating a borrowing opportunity. Instead of using typical proof of income, asset utilization considers a borrower’s total landscape of assets. In the end, this can be more reliable and accurate than the traditional qualification process.
Asset Utilization Qualifier: Potential Borrowers
Virtually anyone can take advantage of the asset utilization program to help qualify for a mortgage loan, but in particular there are a few groups that will find this option beneficial.
Recently Retired
Recently retired individuals are no longer earning a regular income. They don’t have the “nine-to-five” job that used to support their lifestyle, including their borrowing needs. But while they may not have an income, they likely have a significant net worth, which is largely locked into savings, retirement accounts, properties, and their own home. They may not have a regular paycheck, but they could be worth millions.
Irregular Income Earners
There are many different types of earners who have irregular incomes. The most obvious is sales professionals whose incomes are based largely on commission. These people have incomes that can fluctuate by the thousands in any given month, which means a recent paystub may not accurately reflect their annual earnings. Performance-based or seasonal workers, as well as self-employed professionals, also have irregular incomes and may benefit from asset utilization.
People with Inherited Wealth
If you inherited all or some of your wealth, and you want to use this money towards a loan, you may need to verify your net worth to lenders. With asset utilization, you’ll be able to leverage your inherited wealth towards a larger or more luxurious home. It’s important to note that your inherited wealth doesn’t have to be in the millions; if you inherited even a few thousand dollars, asset utilization can be useful.
Types of Assets that Can Be Utilized
Practically anything of value can be applied to asset utilization. However here are a few of the most common types of assets.
Checking, Savings, Certificate of Deposit
If you have significant savings in the bank, asset utilization may be a good option for your needs. Checking, savings, and CDs can all be applied to your qualification, increasing your likelihood of mortgage approval.
Stocks, Bonds, Mutual Funds
Traditional investment accounts can also be leveraged for your mortgage loan. Stocks and mutual funds are some of the most common assets used, as they are owned by many borrowers from all sorts of backgrounds. Government bonds are also common sources of wealth that can be used during asset utilization.
401(k), IRA, Keogh
Retirees often have hundreds of thousands, even millions of dollars tied up in retirement accounts. 401(k)s, IRAs, and Keogh account can add to your stated wealth in the mortgage application and increase your borrowing power by the thousands.
Whole-Life Insurance Policy
If you have a whole-life insurance policy that has a significant amount invested, you may be able to use this account towards your application. Utilizing these accounts is a bit more complicated, but it is possible with the right lending professional.
Bitcoin
Cryptocurrency is rising in acceptance and utilization, and you may be able to put the value of your Bitcoin towards a mortgage loan. While more cryptocurrencies may be accepted in the future, Bitcoin is currently the only one allowed for this program.
Highlights of Our Asset Utilization Program
There are numerous benefits from using this program, including a high borrowing potential and excellent terms.
Loan Amounts up to $3.5 Million
If you are in the market for a high-value home, and need a large loan to make the purchase, this asset utilization program could be perfect. For qualifying borrowers, you may be able to secure a loan up to $3.5 million. This means the vast majority of homes in most markets will be available for purchase if you can qualify for this amount.
Interest-Only Available on 30- & 40-year terms
Another advantage of this loan is that you can get interest-only terms for a 30-year or even a 40-year loan. This allows you to spread the payment terms over a longer period, which can reduce your monthly payments. This has a variety of advantages, including the chance to reinvest capital that would otherwise go towards the loan.
Recent Credit Events Allowed
While the borrowing potential for these asset-utilization loans is massive, the terms are actually quite generous. Allowing recent credit events is one example of this generosity. By “recent credit event,” we mean issues like bankruptcies, foreclosures, missed payments, and other events that often make it hard to secure a loan. With other programs, recent credit events may be disqualifying, but we are able to work with your situation despite past issues.
Credit Scores Down to 620
Asset utilization loans often require a high credit score, but this option allows you to secure financing with a score as low as 620. No, this is not a poor credit score, but it’s certainly not a high score either. This makes the program even more useful to a variety of borrowers and opens the financing to more people with good, if not stellar, credit.
Find the Right Loan for Your Needs
If you are looking for top-quality loans for your specific needs, contact our staff today. From utilizing your assets to finding solutions to past credit issues, we will do our best to secure an affordable loan for your next purchase!
