ASSET DEPLETION
Cash-out Refinance

An Asset Depletion Cash-Out Refinance loan is a type of mortgage that allows borrowers to qualify based on their existing assets rather than traditional income sources. This option is particularly useful for people who are retired, self-employed, or those who have a high net worth but lack a steady income. 

Asset-Based Qualification
Instead of basing loan approval solely on income, lenders calculate your ability to repay by “depleting” your liquid assets (e.g., savings accounts, investments) over time. This is often done over a certain period, like 360 months (30 years), to assess how much you could theoretically afford monthly.

Eligibility
These loans are designed for borrowers who have substantial assets but may not have a traditional income source. Examples include retirees, investors, and entrepreneurs with significant assets who may not meet standard income requirements.

Loan Amount and Terms
The loan amount depends on the value of your assets and the equity you have in your home. Underwriters will  apply a formula to determine how much of your assets can be “depleted” monthly to count as qualifying income. Terms are typically similar to other cash-out refinance loans, but the qualification criteria differ.

Cash-Out Feature
This is a type of cash-out refinance, meaning that in addition to refinancing the existing mortgage, borrowers can take out extra cash against the home’s equity. This cash can be used for other financial needs, like investments, paying off debt, or funding other projects.

Principal Components
– This loan is ideal for individuals who don’t meet traditional income criteria.

– Provides a way to access cash without selling assets or taking on traditional loans.

– These loans may have higher rates or fees due to the unique underwriting.

– Asset Depletion financing is available for borrowers with substantial liquidable or semi-liquidable assets.

An Asset Depletion Cash-Out Refinance loan serves as a strategic option for high-net-worth individuals to unlock the equity in their homes without needing a conventional income source to qualify. Since these loans are asset-based, they allow homeowners with substantial assets (like savings, investments, or retirement accounts) to qualify for refinancing without relying on employment income or business earnings.