Asset Program
Program uses verified assets instead of income. No employment or income needed. This program works well for high net worth folks with significant liquid assets.
Purchase Loans for Primary Residence (1-4 Units)
⇒ 680+ Credit Score requires 10% Down Payment
⇒ Under 680 Credit Score requires 20%+ Down Payment
Purchase Loan for Investment Properties (1-4 Units)
⇒ 680+ Credit Score requires 10% Down Payment
⇒ Under 680 Credit Score requires 20%+ Down Payment
Cash out refinances (1-4 Units)
⇒ 680+ Credit Score requires 85% loan to value (up to 85% of appraised home value)
⇒ Under 680 Credit Score requires 70% loan to value (up to 70% appraised home value)
Eligible Assets
⇒ Bank Deposits – Checking, Saving, Money Market accounts = 100%
⇒ Publicly traded stocks and bonds = 90% (stock options not allowed)
⇒ Mutual Funds = 90%
⇒ Retirement Accounts
⇒ 401(K) plans or IRA, SEP or KEOUGH accounts = 80%
So How Does the Asset Program Work?
We use the formula below to calculate if you qualify for the loan. Basically the total assets minus mortgage loan amount need to be higher than 60 months worth of all the borrowers other debts. This can get a little complicated so please contact us for details.
Loan amount: $400,000
Closing Costs/Prepaids: $15,000
Principal and Interest (P & I) for subject = $2,800
Verified Assets:
• $250,000 Checking and Savings (100% usable) = $ 250,000
• $200,000 Stocks and Bonds (90% usable) = $180,000
• $300,000 401K (80% usable) = $240,000
• $50,000 Mutual Funds (90% usable) = $45,000
Total allowable assets = $715,000
$715,000 (allowable assets) minus $415,000 (loan amount + closing costs/prepaids) = $300,000 residual assets
Total of monthly debt (revolving, installment, alimony/child support, hazard insurance, property tax on the subject property, etc.) excluding subject P&I = $2800 (EXAMPLE)
$2,800 X 60 months = $132,000+ $8,400(required reserves) = $140,400
Since the $300,000 residual assets are more than the required funds of $140,400 to cover all other, this applicant would be qualified.