Asset Depletion Loans in California

You spent years building savings, and now the paycheck has stopped or never looked like much on paper. Your accounts could cover a mortgage for a long time, but a standard lender only counts income that arrives every month. An asset depletion loan closes that gap. The lender treats your savings as if you drew them down evenly over the life of the loan and uses that figure as your monthly income. Advanced Funding Solutions is a mortgage brokerage, so we compare how different lenders run that math before you apply.

Most asset depletion loans are non-QM, short for non qualified mortgage. That is a loan written to a lender's own rules instead of the standard rules Fannie Mae and Freddie Mac use for conventional loans. It is how a borrower with real money but no salary gets a fair look.

How Lenders Turn Savings Into Income

You do not spend a dollar of it. The calculation happens on paper. The lender adds up your eligible accounts, sometimes counts only part of certain balances, and divides the total by the number of months in the loan. A 30 year loan runs 360 months. The monthly figure that comes out counts as income when the lender checks your debt to income ratio, or DTI, which compares what you owe each month to what comes in.

Which Accounts Count

Your cash and investment accounts usually count, including checking, savings, money market accounts, CDs and taxable brokerage accounts. Retirement accounts such as an IRA or 401(k) often count too, though many lenders apply an age rule or use a smaller share of the balance. Home equity and the value of a business you own generally do not, because you cannot spend them without selling something. Trust accounts and business accounts are treated differently from one lender to the next, so tell us early if part of your money sits in one.

Why the Lender You Pick Changes the Number

You could qualify with one lender and fall short with the next on the exact same accounts. Each lender in our network uses its own percentages and its own rules on retirement money, and the gap between them can decide the outcome. We put your balances through several formulas, show you which one counts the most of what you have, and then you apply once with that lender. Send us your balances and we will start there.

Adding Social Security, a Pension or Rent

Your other income does not go to waste. Many lenders let you stack Social Security, a pension, rental income or trust distributions on top of the asset figure. Putting them together is often what gets a retiree over the line when neither source would do it alone. Talk to us about every source you have, even the small ones.

Asset Depletion vs a Conventional Mortgage

If your monthly income already covers the payment, you probably do not need this loan. A conventional mortgage qualifies you on income you receive every month, like a pension or Social Security, and looks at savings mainly for the down payment and reserves. When that income is enough on paper, take the conventional loan. It is usually the less expensive route, and an asset depletion loan would be fixing a problem you do not have. When the income falls short but the accounts are large, asset depletion is often how you get approved without cashing out investments.

When Another Loan Fits Better

You may be better served by a different loan, and we would rather tell you now. If you are self employed and your deposits are strong, a bank statement loan may count more of your real earnings than your savings would.

If you are buying a rental, a DSCR loan (short for debt service coverage ratio) qualifies the property on its own rent. And if you are 62 or older and would rather have no monthly mortgage payment, a reverse mortgage is worth a look.

Jumbo Loans and Rental Property

Asset depletion is not limited to smaller loans or the house you live in. Some lenders write it above the conforming limit the FHFA sets each year, which puts you in jumbo loan territory. Some also allow second homes and rentals with one to four units. Expect a larger down payment and more money in reserve on either one.

Not sure which path fits you? Tell us about your accounts and the home you want, and we will tell you which lenders look like the best fit before you fill out an application.