Unlike the traditional 9-to-5 job with a paycheck every two weeks, more Americans than ever are in a unique financial position. A startup founder that sells off the company for six to eight figures, an entrepreneur who takes dividends but no salary, and a newly retired CEO find themselves in similar situations – plenty of assets but no active income. If you’re in a place like that, you could find that a traditional home loan is tougher to achieve than for a blue-collar worker.
At MBANC, we’re intent on securing the mortgage you deserve. Put your assets to use in getting approved for a mortgage loan you deserve with asset utilization. Here’s what it’s all about
What is Asset Utilization?
When you’re applying for a mortgage at your typical bank or mortgage lender, they require pay stubs and tax returns along with other documents like identity verification and bank statements. It’s a typical part of the process. But if you don’t have the income on paper to support a mortgage, you could be walking away with a rejection letter rather than buying a home.
Asset Utilization is a process that allows MBANC to work with non-traditional mortgage applicants to approve a purchase or get a mortgage on a higher value than would be possible otherwise. An underwriter looks at an asset profile that would typically be outside of the FHA loan qualifications and calculates monthly mortgage payment serviceability looks like based on interest earned on assets.
For example, an applicant with $10 million in total assets but no verifiable and consistent income may be looking to make payments over a number of years – commonly 15 years or 30 years. Using a predetermined formula, the underwriter calculates an average invested return on assets to come up with an asset utilization ratio. From there, it’s determined the home price that can be financed with this unique class of mortgage.
What qualifies as an asset?
If you have something of substantial and verifiable value that is either liquid or can be liquidated quickly, it can be considered an asset for borrowing money in this type of mortgage. A few of the potential asset types include:
- Stocks and bonds
- Accounts for retirement savings like 401K and IRAs.
- Trust funds
- Hedge fund portfolios
- Checking and savings account balances
- Money market accounts and CDs
- Mutual funds
- Some insurance policy cash-out values
Who does an Asset Utilization Mortgage work for?
High-net-worth borrowers can benefit from an asset utilization mortgage, and there’s no restriction on the individual’s profile to seek out this type of product. The typical loan amount is likely to be in the jumbo loan category that’s well outside of the Fannie Mae and Freddie Mac criteria. It’s a great solution for retired individuals sitting on a healthy nest egg, self-employed borrowers, entrepreneurs, and C-suite borrowers who don’t take a regular salary, among others.
Asset utilization mortgages are flexible with either fixed rate or adjustable rate mortgage options. Credit score requirements and LTV ratios are accommodating for a wide range of borrowers.
MBANC is your source for Asset Utilization Mortgages
Are you looking for a mortgage that fits your unique profile and financial portfolio? That’s where MBANC specializes. Our products are tailored for high-net-worth individuals, non-traditional income earners, and self-employed borrowers.
You’ve worked hard to get where you are. Contact us today to get pre-approved for the mortgage you deserve today.