Asset depletion loans California
You retired last year. Sold your business. $2.3 million in investments. Social Security doesn’t start for two years. Apply for a mortgage. Denied. “Insufficient income.”
You have enough cash to buy the house outright twice. Doesn’t matter. Traditional lenders only see monthly income. No paycheck? No loan. Ridiculous but that’s the system.
Asset depletion loans fix this. They look at your wealth, not your paycheck. Calculate qualifying income from your portfolio. Finally makes sense.
Been doing these since the early 2000s. Helped hundreds of retirees and high-net-worth clients who traditional lenders rejected. $1M+ in the bank. Denied by conventional. Approved by asset depletion. Happens constantly.
How Asset Depletion Works
Simple math. Take your liquid assets. Divide by number of months. That’s your qualifying income.
Example: $1.2 million in assets ÷ 240 months = $5,000 monthly income
Lender uses that $5,000 to qualify you. Same debt-to-income ratios as regular loans. Same underwriting standards. Just different income calculation method.
Common division periods:
- 84 months (7 years) – Higher income, aggressive
- 240 months (20 years) – Moderate income, balanced
- 360 months (30 years) – Lower income, conservative
Shorter period = higher monthly income but you need massive assets. Longer period works better for most people.
Had a client last year. Retired at 58. $1.8M in investment accounts. No W-2 income. Traditional lenders? No way. Used 240-month depletion. That’s $7,500 monthly qualifying income. Got approved for $850k loan. Bought a beautiful house in Carmel. 720 credit. 20% down. Rate was 6.875%.
Another client. Sold tech startup. $4.2M in various accounts. Only 55 years old. Wanted $1.2M house in Palo Alto. Asset depletion qualified him at $17,500 monthly income using 240 months. Approved. 740 credit. 25% down. Rate was 6.625%. Perfect solution.
What Assets Count
100% credit:
- Checking accounts
- Savings accounts
- Money market accounts
- CDs
70% credit:
- Stocks
- Bonds
- Mutual funds
- Brokerage accounts
Retirement accounts: Depends on age. Under 59.5? Limited credit. Over 59.5? Better treatment. Over 65? Full consideration usually.
What doesn’t count:
- Real estate holdings
- Business interests
- Collectibles
- Illiquid investments
Lenders want assets they can verify easily. Liquid stuff. Not your rental property equity or vintage car collection.
Asset Seasoning
Can’t just move money around last minute. Lenders require 2 to 3 months of statements showing stable assets.
Transferred $500k from one account to another last week? Fine. Just need paper trail showing it’s your money. Not borrowed. Not gift from someone expecting it back.
Got a sudden $200k deposit? Need explanation. Inheritance? Document it. Business sale? Show the paperwork. Stock sale? Show the 1099.
Requirements
Credit: 700 minimum usually. 740+ gets better rates. Every 20 points matters.
700-739: Possible but tougher. Need strong compensating factors. Higher down payment helps.
740-779: Good position. Standard approval path. Reasonable rates.
780+: Excellent. Best rates. Smoothest process.
Minimum assets: $500k to $1M depending on lender. Higher is better. $2M+ opens up premium programs with better rates.
Down payment: Usually 20% minimum. 25% is common. 30%+ gets best pricing. This isn’t an FHA program. It’s high-net-worth lending.
Debt ratios: Under 43%. Preferably under 35%. Conservative lending.
Had a 710 credit client with $1.5M in assets but wanted 10% down. Denied. Found a lender who did 15% down with same assets. Approved. Down payment matters more on these programs than conventional.
Another client. 780 credit. $3.8M in assets. 30% down. Debt ratio at 28%. Approved in 10 days. Rate was 6.5%. Perfect borrower profile.
Rates and Costs
Rates: 0.5% to 2% above conventional. Currently 6.5% to 7.5% when conventional is around 6%.
On a $700k loan:
- Conventional at 6%: $4,196 monthly
- Asset depletion at 6.75%: $4,539 monthly
Difference is $343 monthly. But if conventional won’t approve you? Doesn’t matter what their rate is. Can’t use it.
Closing costs: Slightly higher. Manual underwriting. Asset verification. Extended processing. Expect $8k to $15k total depending on loan amount.
Best Borrower Profiles
Retirees: Perfect fit. Saved all your life. Living off investments. No W-2 income. Asset depletion was made for you.
Early retirees: 50s or early 60s. Left corporate world. Portfolio sustains lifestyle. Traditional income? Zero. Asset depletion? Works perfectly.
Business sale proceeds: Just sold your company. $2M sitting in accounts. No ongoing income yet. Asset depletion bridges the gap.
Trust fund beneficiaries: Family money. Substantial assets. Limited earned income. Asset depletion gets you qualified.
Divorce settlements: Received substantial settlement. Assets are there. Income isn’t. Asset depletion makes sense.
Had a client who sold her medical practice at 54. $3.1M from the sale. Planning to consult part-time eventually but taking a year off. Traditional lenders rejected her. Asset depletion qualified her at $12,917 monthly income using 240 months. Bought $950k house in Santa Barbara. 740 credit. 25% down. Closed in 40 days.
Another client. Inherited $2.2M at 48 years old. Working part-time by choice making $35k yearly. Traditional lenders wouldn’t approve anything meaningful. Asset depletion used his assets. Qualified him for $650k loan. Got a great house in Sacramento. 710 credit. 20% down. Changed his life.
You Don’t Actually Deplete Assets
Despite the name, you keep your money. The calculation is just for qualifying income. Your $1.5M stays invested. Grows. Compounds. You make mortgage payments from wherever you want.
Some people think asset depletion means you draw down accounts to pay the mortgage. Wrong. It’s just math for qualification. Once approved, your assets stay untouched.
California Market Fit
California homes are expensive. Median price around $785k. Need serious assets to qualify through depletion.
San Francisco Bay Area: $500k minimum usually works for $650k loans. $1M+ is better.
Los Angeles: Similar. Expensive market needs substantial assets.
San Diego: Slightly lower but still pricey. $750k minimum assets recommended.
Sacramento: More affordable. $500k in assets can work well here.
Coastal areas: Premium markets need premium assets. $1M+ is common requirement.
Process and Timeline
Pre-approval: 3 to 5 days once we have asset statements. Calculate income. Run credit. Done.
Full approval: 30 to 45 days typical. Manual underwriting takes time. Asset verification. Account reviews. Not fast but thorough.
Communication matters: Underwriters ask questions about accounts. Source of funds. Investment strategy. Respond quickly. Keeps process moving.
Asset Depletion vs Other Programs
Asset depletion advantages:
- No income documentation needed
- Use wealth not wages
- Keep assets invested
- Clean qualification path
Bank statement comparison: Asset depletion usually better for retirees. Bank statements better for self-employed with business income.
CPA P&L comparison: P&L better if you have business showing profit. Asset depletion better if retired or not working.
Traditional comparison: Conventional better if you have W-2 income. Asset depletion better if income-light but asset-rich.
Had a client who qualified three different ways. W-2 income from consulting: $650k loan. Bank statements from side business: $725k loan. Asset depletion from $2.1M portfolio: $900k loan. Went with asset depletion. Highest qualification. Best for his needs.
Long-Term Strategy
Asset depletion isn’t temporary. It’s permanent financing. Your assets stay invested. Mortgage gets paid from whatever income sources you choose. No requirement to liquidate.
Market drops 20%? Doesn’t matter. Loan already closed. Your assets could go to zero and loan doesn’t change. They qualified you at closing. Done deal.
Assets grow 30%? Great. More wealth. Loan balance drops over time. You’re building equity while assets compound.
Many clients keep asset depletion loans long-term. No reason to refinance if rate is reasonable and payment works. Simple. Clean. Done.
Bottom Line
Asset depletion loans were designed for exactly this situation – substantial wealth, limited traditional income. California’s expensive market makes them particularly valuable.
$500k minimum gets you started. $1M+ opens up better programs. Excellent credit helps. Conservative down payments work best.
Been helping high-net-worth and retired clients for decades. Traditional lenders don’t understand this market. We do. Check our FAQ for more questions or call (510) 589-4096 to discuss your specific situation.
You retired last year. Sold your business. $2.3 million in investments. Social Security doesn’t start for two years. Apply for a mortgage. Denied. “Insufficient income.”
You have enough cash to buy the house outright twice. Doesn’t matter. Traditional lenders only see monthly income. No paycheck? No loan. Ridiculous but that’s the system.
Asset depletion loans fix this. They look at your wealth, not your paycheck. Calculate qualifying income from your portfolio. Finally makes sense.
Been doing these since the early 2000s. Helped hundreds of retirees and high-net-worth clients who traditional lenders rejected. $1M+ in the bank. Denied by conventional. Approved by asset depletion. Happens constantly.
How Asset Depletion Works
Simple math. Take your liquid assets. Divide by number of months. That’s your qualifying income.
Example: $1.2 million in assets ÷ 240 months = $5,000 monthly income
Lender uses that $5,000 to qualify you. Same debt-to-income ratios as regular loans. Same underwriting standards. Just different income calculation method.
Common division periods:
- 84 months (7 years) – Higher income, aggressive
- 240 months (20 years) – Moderate income, balanced
- 360 months (30 years) – Lower income, conservative
Shorter period = higher monthly income but you need massive assets. Longer period works better for most people.
Had a client last year. Retired at 58. $1.8M in investment accounts. No W-2 income. Traditional lenders? No way. Used 240-month depletion. That’s $7,500 monthly qualifying income. Got approved for $850k loan. Bought a beautiful house in Carmel. 720 credit. 20% down. Rate was 6.875%.
Another client. Sold tech startup. $4.2M in various accounts. Only 55 years old. Wanted $1.2M house in Palo Alto. Asset depletion qualified him at $17,500 monthly income using 240 months. Approved. 740 credit. 25% down. Rate was 6.625%. Perfect solution.
What Assets Count
100% credit:
- Checking accounts
- Savings accounts
- Money market accounts
- CDs
70% credit:
- Stocks
- Bonds
- Mutual funds
- Brokerage accounts
Retirement accounts: Depends on age. Under 59.5? Limited credit. Over 59.5? Better treatment. Over 65? Full consideration usually.
What doesn’t count:
- Real estate holdings
- Business interests
- Collectibles
- Illiquid investments
Lenders want assets they can verify easily. Liquid stuff. Not your rental property equity or vintage car collection.
Asset Seasoning
Can’t just move money around last minute. Lenders require 2 to 3 months of statements showing stable assets.
Transferred $500k from one account to another last week? Fine. Just need paper trail showing it’s your money. Not borrowed. Not gift from someone expecting it back.
Got a sudden $200k deposit? Need explanation. Inheritance? Document it. Business sale? Show the paperwork. Stock sale? Show the 1099.
Requirements
Credit: 700 minimum usually. 740+ gets better rates. Every 20 points matters.
700-739: Possible but tougher. Need strong compensating factors. Higher down payment helps.
740-779: Good position. Standard approval path. Reasonable rates.
780+: Excellent. Best rates. Smoothest process.
Minimum assets: $500k to $1M depending on lender. Higher is better. $2M+ opens up premium programs with better rates.
Down payment: Usually 20% minimum. 25% is common. 30%+ gets best pricing. This isn’t an FHA program. It’s high-net-worth lending.
Debt ratios: Under 43%. Preferably under 35%. Conservative lending.
Had a 710 credit client with $1.5M in assets but wanted 10% down. Denied. Found a lender who did 15% down with same assets. Approved. Down payment matters more on these programs than conventional.
Another client. 780 credit. $3.8M in assets. 30% down. Debt ratio at 28%. Approved in 10 days. Rate was 6.5%. Perfect borrower profile.
Rates and Costs
Rates: 0.5% to 2% above conventional. Currently 6.5% to 7.5% when conventional is around 6%.
On a $700k loan:
- Conventional at 6%: $4,196 monthly
- Asset depletion at 6.75%: $4,539 monthly
Difference is $343 monthly. But if conventional won’t approve you? Doesn’t matter what their rate is. Can’t use it.
Closing costs: Slightly higher. Manual underwriting. Asset verification. Extended processing. Expect $8k to $15k total depending on loan amount.
Best Borrower Profiles
Retirees: Perfect fit. Saved all your life. Living off investments. No W-2 income. Asset depletion was made for you.
Early retirees: 50s or early 60s. Left corporate world. Portfolio sustains lifestyle. Traditional income? Zero. Asset depletion? Works perfectly.
Business sale proceeds: Just sold your company. $2M sitting in accounts. No ongoing income yet. Asset depletion bridges the gap.
Trust fund beneficiaries: Family money. Substantial assets. Limited earned income. Asset depletion gets you qualified.
Divorce settlements: Received substantial settlement. Assets are there. Income isn’t. Asset depletion makes sense.
Had a client who sold her medical practice at 54. $3.1M from the sale. Planning to consult part-time eventually but taking a year off. Traditional lenders rejected her. Asset depletion qualified her at $12,917 monthly income using 240 months. Bought $950k house in Santa Barbara. 740 credit. 25% down. Closed in 40 days.
Another client. Inherited $2.2M at 48 years old. Working part-time by choice making $35k yearly. Traditional lenders wouldn’t approve anything meaningful. Asset depletion used his assets. Qualified him for $650k loan. Got a great house in Sacramento. 710 credit. 20% down. Changed his life.
You Don’t Actually Deplete Assets
Despite the name, you keep your money. The calculation is just for qualifying income. Your $1.5M stays invested. Grows. Compounds. You make mortgage payments from wherever you want.
Some people think asset depletion means you draw down accounts to pay the mortgage. Wrong. It’s just math for qualification. Once approved, your assets stay untouched.
California Market Fit
California homes are expensive. Median price around $785k. Need serious assets to qualify through depletion.
San Francisco Bay Area: $500k minimum usually works for $650k loans. $1M+ is better.
Los Angeles: Similar. Expensive market needs substantial assets.
San Diego: Slightly lower but still pricey. $750k minimum assets recommended.
Sacramento: More affordable. $500k in assets can work well here.
Coastal areas: Premium markets need premium assets. $1M+ is common requirement.
Process and Timeline
Pre-approval: 3 to 5 days once we have asset statements. Calculate income. Run credit. Done.
Full approval: 30 to 45 days typical. Manual underwriting takes time. Asset verification. Account reviews. Not fast but thorough.
Communication matters: Underwriters ask questions about accounts. Source of funds. Investment strategy. Respond quickly. Keeps process moving.
Asset Depletion vs Other Programs
Asset depletion advantages:
- No income documentation needed
- Use wealth not wages
- Keep assets invested
- Clean qualification path
Bank statement comparison: Asset depletion usually better for retirees. Bank statements better for self-employed with business income.
CPA P&L comparison: P&L better if you have business showing profit. Asset depletion better if retired or not working.
Traditional comparison: Conventional better if you have W-2 income. Asset depletion better if income-light but asset-rich.
Had a client who qualified three different ways. W-2 income from consulting: $650k loan. Bank statements from side business: $725k loan. Asset depletion from $2.1M portfolio: $900k loan. Went with asset depletion. Highest qualification. Best for his needs.
Long-Term Strategy
Asset depletion isn’t temporary. It’s permanent financing. Your assets stay invested. Mortgage gets paid from whatever income sources you choose. No requirement to liquidate.
Market drops 20%? Doesn’t matter. Loan already closed. Your assets could go to zero and loan doesn’t change. They qualified you at closing. Done deal.
Assets grow 30%? Great. More wealth. Loan balance drops over time. You’re building equity while assets compound.
Many clients keep asset depletion loans long-term. No reason to refinance if rate is reasonable and payment works. Simple. Clean. Done.
Bottom Line
Asset depletion loans were designed for exactly this situation – substantial wealth, limited traditional income. California’s expensive market makes them particularly valuable.
$500k minimum gets you started. $1M+ opens up better programs. Excellent credit helps. Conservative down payments work best.
Been helping high-net-worth and retired clients for decades. Traditional lenders don’t understand this market. We do. Check our FAQ for more questions or call (510) 589-4096 to discuss your specific situation.