Using Assets as Income
Overview:
Did you know that you can use your investment accounts as income to qualify for a home loan? Many people believe that if they have a non-traditional employment situation or aren't salaried employees, they can't buy a house. However, there are creative strategies that allow you to leverage your assets to qualify for a mortgage. In this blog post, we'll explore two methods: asset depletion and using trust account distributions as income. These techniques can be used with a conventional loan, but it's crucial to work with an experienced lender who understands these options.
UNDERSTANDING THE DETAILS
SECTION 1
ASSET DEPLETION
Asset depletion is a method where certain homebuyers can use their investment accounts as qualifying income. Here's how it works: We take a portion of your assets and divide it by the number of months in your mortgage. For instance, a 30-year loan has 360 months. The resulting amount is considered qualifying income that can be used to support your mortgage application. By utilizing this approach, you can demonstrate your ability to make monthly mortgage payments based on your assets.
SECTION 2
Trust Account Distributions
If you have an account held in a trust and there is a provision for monthly distributions, you can use this income to qualify for a home loan. To be eligible, the account must have sufficient funds to cover the distributions for at least three years. This shows stability and reassures lenders that you have a consistent source of income to support your mortgage payments. By leveraging trust account income you can help bridge the gap when income is irregular.
SECTION 3
Working with the Right Lender
It's essential to collaborate with a knowledgeable lender who understands these creative strategies and can guide you through the process. When seeking a home loan, make sure to choose a lender who has experience with asset depletion and trust account income qualification. Their expertise will ensure that you can take full advantage of these methods and increase your chances of successfully buying a home.
Buying a home is an exciting milestone, and with the right knowledge, you can explore creative ways to qualify for a mortgage. Utilizing your assets, such as investment accounts and trust account distributions, as income can open doors to homeownership, even if you don't have a traditional employment situation. By employing asset depletion or leveraging trust account income, you can demonstrate your financial stability to lenders. Remember to partner with a reputable lender who specializes in these strategies to receive the guidance you need throughout the process.