Asset Depletion Mortgage Loans Up to $3 Million in California

Are you in the market for an asset depletion mortgage loan in California? Or maybe you’ve heard about this financing strategy but aren’t exactly sure how it works?

In either case, keep reading! In this article, we will explain how these loans work, and how you could use an asset depletion mortgage in California to borrow up to $3 million.

The Asset Depletion Mortgage Explained

Some borrowers are able to use their financial assets as income when qualifying for a home loan in California. This financing method is known as the “asset depletion mortgage.”

(You might also encounter the terms asset “utilization” or “dissipation.” All of these terms generally refer to the same thing.)

This financing option is often used by borrowers in California who:

• Are self-employed but show minimal income
• Are currently retired or soon will be
• Have a relatively low monthly income, or none at all
• Have no verifiable employment

These and other types of “non-traditional” borrowers could benefit from using an asset depletion mortgage. In fact, any borrower who has significant assets but a lack of steady income might be a good candidate for this financing strategy.

Now you can see where the “depletion” name comes from. With this type of home loan, the borrower agrees to use (or “deplete”) his/her financial assets to pay off the mortgage balance over time.

An Alternative to ‘Traditional’ Financing

Some borrowers in California use asset depletion mortgage loans as a flexible alternative to traditional home loan financing.

With a “regular” mortgage loan, you would primarily use your regular monthly income to qualify. To do this, you would provide a variety of documents to verify your income, including the W-2 form.

But the asset depletion mortgage works differently. With this financing method, you are using your financial assets to qualify for the home loan. For instance, you might use one or more of the following:

• Certificates of Deposit (CD)
• Money market accounts
• Checking or savings accounts
• Investment accounts, including stocks, bonds and mutual funds
• Retirement accounts like the 401k or IRA

But here again, documentation is required. When applying for an asset depletion mortgage loan in California, you’ll need to provide documents to verify the type and amount of assets being used (in lieu of income).

Home Loans Up to $3 Million in Some Cases

When it comes to mortgage loans, the amount you can borrow mainly depends on your ability to repay the debt. This is true for both traditional and asset depletion mortgage products. You must have sufficient means to manage the monthly payments.

In the case of an asset depletion home loan, however, the amount you can borrow will largely depend on the total amount of assets and the level of liquidity.

Often, the total balance gets divided by 360 for a 30-year home loan. (Since there are 360 months in 30 years.) This kind of calculation helps lenders determine how much of a monthly payment you can manage, based on your assets. That’s a bit of an oversimplification, but you get the idea.

In certain cases, we are able to qualify borrowers for asset depletion mortgage loans up to $3 million. That’s an important point, given the expensive nature of the California real estate market. The main requirement here is that the borrower’s financial assets are sufficient to cover the monthly payments.

Have Questions? Need Financing?

Not all lenders in California offer the asset depletion mortgage loan. It’s a specialized product with unique qualification and underwriting criteria. But it’s also highly useful for certain types of borrowers.

Located in the Bay Area, Bridgepoint Funding offers asset depletion mortgage loans to borrowers across the state of California. As mentioned above, we can offer borrowers financing of up to $3 million in some cases.

Please contact us if you have questions about using an asset depletion mortgage in California, or if you would like to start the application process.