Asset Depletion Loans

Asset Depletion Loans: Mortgage Financing Based on Your Assets

Asset depletion loans provide mortgage financing for borrowers using their liquid assets instead of traditional income documentation.

This specialized program recognizes that substantial assets represent financial capacity, even when current income may be limited or irregular.

For retirees, high-net-worth individuals, and those with substantial assets but limited current income, asset depletion loans can offer a path to homeownership when traditional lenders cannot accommodate them.

What is an Asset Depletion Loan?

Definition

An asset depletion loan is a specialized mortgage program that allows borrowers to qualify for a home loan based on their liquid assets rather than traditional income documentation. The program calculates a monthly income equivalent based on the borrower's assets.

How it works

Instead of using traditional income documentation, these loans calculate a monthly income equivalent based on your liquid assets. The lender divides your assets by a specific number of months (typically 240-360 months) to determine your qualifying monthly income.

Key advantage

Asset depletion loans bridge the gap between current income limitations and actual financial capacity, making homeownership accessible to asset-rich borrowers who may have limited current income but substantial financial resources.

Another Lender for Novus Home Mortgage

Coby MatushNMLS Verified

Loan Officer

Novus Home Mortgage

NMLS #1531494

20225 Water Tower Blvd, Suite 400, Brookfield, WI 53045

Email: cmatush@novushomemortgage.com

Phone: 724-787-7778

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How Asset Depletion Loans Work

An asset depletion loan uses your liquid assets to calculate qualifying income instead of traditional documentation. You typically need substantial liquid assets (typically $500k+), 680 credit score, and 20% down payment. This program may be suitable for borrowers who were denied conventional mortgages due to limited current income despite having substantial assets.

Basic Asset Depletion Loan Eligibility

You may be eligible for an asset depletion loan if you have:

• Substantial liquid assets (typically $500k+)
• 680 credit score
• 20% down payment
• No recent credit issues

Common Asset Depletion Loan Eligibility Requirements

Credit score:

680 FICO score

Down payment:

20%

Assets:

Substantial liquid assets (typically $500k+)

Documentation:

Asset verification through account statements

Loan amounts:

Up to $3,000,000

Reserves:

6 months of reserves

Mortgage history:

Typically no mortgage lates in the past 12 months

Bankruptcy/foreclosure:

Typically no bankruptcy, foreclosure, or deed-in-lieu in the last 4 years

Income calculation:

Assets divided by 240-360 months

Gift funds:

Allowed for primary residences

Why You Need Another Lender

If you've been denied a mortgage despite having substantial assets, you're not alone. Many traditional banks simply don't offer programs designed for asset-rich borrowers. They rely on standard documentation like current income, which doesn't tell the full story of your financial capacity.

Your first bank just doesn't offer the right program for you.

Think of it like when a customer asks for something your business doesn't offer. Maybe they want delivery but you only do pickup, or they need a service you don't provide. You're not saying no because there's anything wrong with them—you just don't offer that particular service. Same with mortgages. Traditional banks work great for most people, but they don't offer the programs that asset-rich borrowers need.

Traditional banks use conventional underwriting that works well for borrowers with steady current income but struggles with asset-rich borrowers. Your substantial assets represent significant financial capacity, but conventional programs focus on current income and can't approve you, even though your assets demonstrate strong financial health.

Asset depletion loans are perfect for retirees who have substantial assets but limited current income, high-net-worth individuals with irregular income patterns, or anyone who has built significant wealth but faces traditional lender roadblocks due to current income limitations.

This isn't about finding loopholes or gaming the system. It's about working with lenders who understand how wealth actually works. Asset depletion loans are offered by lenders who work with asset-rich borrowers every day. They look at your actual financial capacity—the assets you've accumulated—rather than just your current income.

For a no obligation conversation about your mortgage, contact Coby Matush (#1531494) of Novus Home Mortgage at 724-787-7778.

Example Use Cases and Scenarios

How Do Asset Depletion Loans Work?

Asset depletion loans follow the same basic mortgage process as conventional loans, with one key difference: income calculation. This alternative method allows borrowers to qualify using their assets instead of traditional income documentation.

The Asset Depletion Loan Process

1. Asset Assessment & Income Calculation Process

Instead of tax returns and W-2s, you provide proof of your liquid assets. The income calculation process begins with asset verification where lenders examine your account statements, followed by income calculation where lenders divide your assets by 240-360 months to determine monthly qualifying income. Lenders then complete the qualification process using this asset-based income figure. This process typically results in much higher qualifying income than traditional income documentation.

2. Standard Mortgage Process

Everything else follows the same process as conventional loans: credit check with minimum 680 FICO score, property appraisal using standard residential appraisal, title search to ensure clear property ownership, and standard mortgage documentation including loan application, disclosures, and insurance requirements. The only difference is how your income is calculated - everything else uses identical underwriting standards and consumer protections.

3. Underwriting

Experienced underwriters review your complete profile using the asset-based income calculation instead of traditional income verification. They assess your creditworthiness including payment history and debt-to-income ratio, property value through appraisal and market analysis, and ability to repay based on your asset-calculated income. The underwriting process includes the same risk assessment, just with alternative income calculation.

4. Approval & Closing

Once approved, the closing process is identical to conventional mortgages. You'll sign the same documents including promissory note, deed of trust, and closing disclosure, pay the same types of fees such as origination, appraisal, and title insurance, and receive the same level of consumer protection including RESPA disclosures and right of rescission for refinances. The loan terms, interest rates, and repayment structure follow standard mortgage industry practices.

Real-World Example: Asset Depletion Loans

Benefits & Considerations

Asset depletion loans offer significant advantages for asset-rich borrowers, but they also come with important considerations to weigh.

Frequently Asked Questions About Asset Depletion Loans

Get answers to the most common questions about asset depletion loans. Whether you're wondering about qualification requirements, documentation needs, or how the process works, we've covered the essential information below.

Next Steps: Continue With Your Mortgage

Asset depletion loans may provide a path to homeownership for asset-rich borrowers turned down by traditional lenders. Our listed loan officers understand asset-based lending and can help determine if this program might fit your situation. They'll review your assets, assess eligibility, and guide you through the process.

For a no obligation conversation about your mortgage, contact Coby Matush (#1531494) of Novus Home Mortgage at 724-787-7778.