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When To Consider An Asset Utilization Loan

Oregon Asset Utilization Loans

An asset utilization mortgage loan, sometimes referred to as an asset depletion loan, is a type of mortgage that allows borrowers to use their assets, such as investments, savings, or retirement accounts, to qualify for a mortgage, rather than relying solely on traditional income documentation.

Who Are These Loans A Good Fit For?

Asset Utilization Loans are a great option to consider for the following different types of borrowers:

  1. High-net-worth individuals: Borrowers with significant assets but low reported income may find asset utilization loans useful. Traditional mortgage loans typically rely on income verification, but high-net-worth individuals may have substantial assets that can be used to demonstrate their ability to repay the loan.

  2. Self-employed individuals: Entrepreneurs, freelancers, and self-employed individuals often have fluctuating income streams, which can make it challenging to meet the strict income requirements of conventional mortgages. Asset utilization loans provide an alternative for these borrowers, as they can leverage their assets to secure a mortgage.

  3. Retirees: Retirees who have retired comfortably and possess substantial assets, such as retirement accounts or investment portfolios, might not have substantial income from traditional sources. Asset utilization loans can be an option for them to access mortgage financing.

  4. Foreign buyers: Non-U.S. citizens who want to purchase property in the United States may not have the necessary income documentation required for conventional mortgages. Asset utilization loans (along with ITIN Loans) can be a viable options to help foreign borrowers secure financing based on their global assets.

  5. Real estate investors: Seasoned real estate investors who own multiple properties and have significant assets tied up in real estate holdings may find it beneficial to use an asset utilization loan to expand their property portfolio.

Asset Utilization Loan Features

Although the specific rates and terms s will vary depending on a borrowers credit, assets, and unique situation, here are a few common features of Asset Utilization Loans:

  • Loan Amounts up to $3 Million for purchases or refinances

  • Minimum FICO score of 660

  • Maximum Loan-to-Value (LTV) is 80% for purchase or refinance

  • Maximum Cash-Out Refinance is 70%

  • 4 Months of account statements required

  • Debt-to-income ratio is not calculated or required

  • Properties can be single family and multifamily (max 4 units)

Conventional Mortgage Loans vs Asset Utilization Loans

A conventional mortgage loan is a standard home loan based on the borrower's creditworthiness and income, using the property as collateral. In contrast, an asset utilization loan considers a borrower's overall wealth, including investments and assets, allowing them to leverage these resources to secure a loan without traditional income verification. Here are some of the different features between these different kinds of loans:

Conventional Loans

Asset Utilization Loans

Documentation Required

W-2 forms, pay stubs, tax returns

Less documentation required, focusing on borrowers asset

Credit Requirements

Strict credit score and history requirements

Borrowers with 660+ FICO score

Loan-to-Value (LTV)

Up to 97%

Up to 80%

Loan Approval Process

More rigorous and time-consuming approval process

Faster approval process

Interest Rate

​Typically lower

​Typically higher

​Ideal Borrowers

Borrowers with stable income and decent credit history

High-Net-Worth Borrowers, Self Employed, Retirees, Real Estate Investors, Foreign Buyers

Is An Asset Utilization Loan Right For You?

It's essential to note that asset utilization loans might have different eligibility criteria, interest rates, and terms compared to conventional mortgages. As with any financial decision, borrowers should thoroughly research and consult with our team at NW Alternative Mortgage to determine if this type of loan suits your specific needs and financial situation. Call us today at 503-343-7999 to learn more about out Asset Utilization Loan program!


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