Asset Depletion Mortgages
People who have assets that are easily converted into cash (CD’s, 401K, etc.) but no income, or not enough, can get a mortgage if those assets are enough to cover down payment, closing costs, and to make 60 or 84 monthly payments (these are 5/1 or 7/1 ARM loans).
Lenders go by the full value of CD’s and such accounts, 60% or 70% of the value of 401K’s and such accounts to qualify a borrower for an asset depletion mortgages.
There are a few restrictions, to make sure that borrowers can, indeed, use the funds easily, such as: Assets in an IRA and 401(k) must be in fully-vested retirement accounts recognized by the Internal Revenue Service to which the borrower has full access to them.
Real estate and businesses can’t be used to qualify for this type of mortgage loan, though, unless you’ve just sold them. Of course, if you have