Asset Utilization Loans

Asset Utilization Loans Are Good For:

Asset utilization loans are ideal for borrowers with significant savings or investments who want to qualify without relying on traditional income. This includes retirees, business owners, and investors who may not have W-2 income but have enough assets to support the loan.

How Asset Utilization Loans Work

Asset utilization loans are considered non-QM (non-qualified mortgage) loans. Lenders look at your total eligible assets and divide them over a set period to calculate a qualifying monthly income. This replaces the need for standard income documentation.

Qualification Process

Asset utilization loans often require higher credit scores and a larger down payment, usually starting at 20 percent. Interest rates may vary depending on loan size, asset type, and borrower profile.

• Asset Calculation: Lenders assess the total value of a borrower’s eligible assets to determine qualifying income.
• Income Calculation: The monthly income is often calculated by dividing the total liquid assets by a specified period, typically 84 months.
• No Income Verification: Borrowers do not need to provide traditional income documentation like W-2s or pay stubs.

Eligible Assets

The following assets can typically be used to qualify for an asset utilization loan:

• Checking and savings accounts
• Money market accounts
• Stocks and bonds
• Certificates of deposit (CDs)
• Retirement accounts (e.g., 401(k), IRA)
• Mutual funds

Benefits and Considerations

Advantages

• Flexible Qualification: Ideal for high-net-worth individuals or those with non-traditional income.
• No Need to Liquidate Assets: Borrowers can keep their investments intact while using them to qualify for a loan.
• Variety of Property Types: Can be used for primary residences, second homes, or investment properties.