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Asset Only Home Loans

What is an Asset-based mortgage?

An Asset-based mortgage is a loan that is secured against the value of your personal assets. This loan allows borrowers to qualify based on their liquid assets rather than their income. The borrower will not be required to provide tax returns when applying for the loan. An asset-based mortgage is excellent for someone who has trouble showing consistent income but has significant asset balances. This may include:

  • Self-employed borrowers who show minimal income

  • A borrower with little to no income but significant assets

  • A borrower who is retired or soon to be retired

What Assets are Eligible for Qualification?

  • Stocks

  • Bonds

  • Checking or Savings account funds

  • Retirement account funds

These assets refer to funds that can be liquidated (converted to cash or cash equivalents) within 30 days.  Qualified purchasers may be able to borrow up to 90%* of the property's value on a purchase and 80%* of the property's value as a cash out refinance. Although no monthly income is necessary for eligibility, the loan file must show evidence of the borrower's "ability to repay."

How do I qualify for an Asset-based mortgage?

In order to qualify for an Asset-based mortgage, you will need to have a good credit history and be able to demonstrate that you can afford the monthly repayments. Because there is no debt-to-income calculation for this program, borrowers' post-closure assets must total one of the three criteria below.

Method One | Mortgage Only Total post-closing assets must equal 125% of all outstanding mortgage debt for which the Applicant has personal liability. Any mortgage debt which an applicant may document in compliance with Business Debt in Borrower’s Name or Co-Signed Loans Sections may be omitted from this calculation.

Method Two | Simplified Total post-closing assets must equal 120% of the subject loan amount on the subject property plus 30% of all other outstanding debt (mortgage and consumer). Any debt which an applicant may document in compliance with business debt in borrower’s name or co-signed loans may be omitted from this calculation.

Method Three | Traditional

  • 100% of Loan Amount

  • Reserves required per program guidelines

  • 60 months of total of other debt service, as determined by the liability section of this guideline. Do not include PITIA on rental properties, as that is addressed separately. Do not include PITIA on the subject property.

What are the benefits of an Asset-based mortgage?

The main benefit of an Asset-based mortgage is that you can borrow more money than with a traditional mortgage. This can be helpful if you need a large sum to purchase a new home or if you want to consolidate your debts into your mortgage.

Are there any drawbacks to an Asset-based mortgage?

The main drawback of an Asset-based mortgage is that you will need to have a good credit history and substantial assets to be able to afford the monthly repayments. Typically, the rate on these mortgages is slightly higher as well. It is also important to remember that the value of your assets may go down over time if you’re using those assets to satisfy monthly payments.

Make sure you speak to a qualified mortgage advisor such as Onshore Mortgage to find out if this type of loan is right for you.

*Credit and income restrictions do apply. Please visit our Disclosures page for a detailed breakdown of all loan types.