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Borrowers with substantial eligible liquid assets may qualify through an asset-depletion calculation or an asset-qualifier method, depending on the current program.
An asset-depletion program may divide eligible assets over a defined period to create qualifying income. An asset-qualifier program may instead require eligible assets equal to a specified percentage of total mortgage debt without calculating a traditional debt-to-income ratio.
Cash, investments, retirement funds and other assets may receive different treatment. Funds needed for closing, reserves or other obligations may be excluded, discounted or subject to seasoning. Cryptocurrency may be considered only after conversion to eligible U.S.-dollar assets under applicable guidelines.
Current partner options may consider primary homes, second homes, investment properties, two-to-four-unit properties, condos, interest-only payments and qualifying short-term-rental income. The source program described leverage up to 85% and loan amounts up to $3.5 million, but actual limits depend on the full scenario.
Using assets to qualify does not necessarily require liquidating them, but borrowers should consider liquidity, market risk, retirement needs and borrowing cost with appropriate financial and tax advisers.
Frequently asked questions
Not necessarily. Programs may calculate income or qualification from eligible assets, but required funds, discounts, seasoning and reserve treatment vary.
Some retirement assets may be considered with program-specific treatment. Accessibility, taxes, penalties and the borrower's age can affect the calculation.
General information is useful. A mortgage professional can help you evaluate the facts that apply to you.
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