Asset Depletion and Asset Qualifier Mortgage Loans in Florida
Borrowers with substantial verified assets may be able to qualify for a Florida mortgage
without relying entirely on traditional employment income or tax-return income. Asset
Depletion and Asset Qualifier loans both use eligible assets, but the qualification
methods are materially different.
Assets Are Converted Into Monthly Qualifying Income
Asset Depletion converts eligible verified assets into monthly qualifying income.
Depending on the lender and program, adjusted eligible assets may be divided over
60 or 84 months.
The resulting monthly amount is then used as qualifying income when evaluating the
borrower’s proposed housing payment and other monthly obligations.
Qualification Is Based on Remaining Eligible Assets
Asset Qualifier does not convert assets into monthly income. Under certain programs,
the borrower must have eligible assets equal to at least 125% of qualifying mortgage
debt remaining after the loan closes.
A traditional debt-to-income calculation may not be required, although complete
credit, asset, property and transaction guidelines still apply.
Asset Depletion and Asset Qualifier Examples
Asset Depletion Example
Assume a borrower has $1,200,000 in eligible assets after applicable deductions.
If the lender divides those assets over 60 months:
$20,000 monthly qualifying income
The lender may deduct funds needed for closing and reserves and may discount certain
retirement, securities or investment assets.
Asset Qualifier Example
Assume the qualifying mortgage debt is $1,000,000 and the program requires eligible
assets equal to 125% of that amount:
$1,250,000 required eligible assets
The required assets must generally remain after the down payment, closing costs and
other required funds are accounted for.
Mortgage Qualification for Asset-Rich Borrowers
Asset-based mortgage programs are not limited to retirees. They may help a wide range
of borrowers whose financial strength is reflected more clearly in their assets than
in conventional monthly income.
Business Owners
Entrepreneurs who retain wealth in cash or investments or recently completed a
business sale may have substantial assets but irregular taxable income.
Self-Employed Borrowers
Business deductions can reduce reported taxable income even when the borrower has
a strong balance sheet and significant liquid assets.
Investors
Borrowers with cash reserves, brokerage accounts and investment portfolios may
qualify using verified assets rather than employment income alone.
High-Net-Worth Buyers
Buyers of higher-priced primary residences, second homes and condominiums may need
qualification that recognizes their total asset strength.
Recently Retired Borrowers
A borrower may have substantial savings and investments but limited pension,
Social Security or recurring distribution income.
Borrowers Between Income Events
Asset-based qualification may help borrowers relocating, changing careers or
transitioning after a major liquidity event.
What Types of Assets May Be Considered?
Eligible assets and the percentage of each asset that may be used vary by lender.
Assets must generally be verified, owned by the borrower, accessible and acceptable
under the program guidelines.
Retirement accounts, securities and other investments may be discounted. Funds required
for the down payment, closing costs and reserves may be excluded from the qualifying
asset calculation.
Primary Homes, Second Homes and Condominiums
Depending on the lender and program, Asset Depletion or Asset Qualifier financing
may be available for primary residences, second homes and certain condominium
properties.
Loan amounts, down-payment requirements, occupancy rules, loan-to-value limits and
condominium eligibility vary by lender and borrower profile.
Strong Assets Do Not Always Fit Standard Underwriting
Traditional banks often focus heavily on W-2 income, tax returns or recurring
monthly distributions. That may create difficulties for borrowers whose financial
strength is held in cash, investments or other verified liquid assets.
Access to multiple wholesale lenders allows Greg Hayden to compare alternative
qualification methods instead of relying on only one bank’s underwriting guidelines.
Compare Asset-Based Mortgage Options From Multiple Lenders
Additional Florida Mortgage Options
Explore related information for Florida jumbo loans, bank statement loans, no-income-verification mortgage loans, Palm Beach County, Broward County, and the complete loan-program list.
Asset Depletion and Asset Qualifier Questions
Are Asset Depletion and Asset Qualifier the same loan?
No. Asset Depletion converts eligible assets into qualifying monthly income.
Asset Qualifier evaluates whether the borrower has the required amount of eligible
assets remaining after closing.
Does Asset Qualifier require a debt-to-income calculation?
Some Asset Qualifier programs do not use a traditional debt-to-income calculation.
The borrower must still satisfy the lender’s complete asset, credit, property and
transaction requirements.
Are retirement accounts eligible?
Certain vested and accessible retirement assets may be considered. The lender may
discount their value and apply age, access or withdrawal requirements.
Do I need to be retired to use an asset-based mortgage?
No. Business owners, investors, self-employed borrowers, high-net-worth buyers,
recently retired borrowers and others with substantial eligible assets may qualify.
Can these programs be used for a Florida condominium?
Certain condominium properties may be eligible, subject to the lender’s program
rules and the condominium project meeting applicable approval requirements.
How do I know which asset program fits my situation?
Greg Hayden can review your assets, property, occupancy, loan amount and financial
profile to compare Asset Depletion, Asset Qualifier and other mortgage options.
Speak Directly With Greg Hayden
Compare Asset Depletion and Asset Qualifier programs for a Florida primary home,
second home or qualifying condominium.