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Profile picture for cimby

Is it possible to get a mortgage with (very) low income but high asset availability?

Hi there,

Because I am currently a full-time grad student, my income (based on a service-based stipend for teaching intro college classes) is pretty rock bottom. But I do have quite a bit of money in assets that can be used for a solid down payment (at least 20%) and towards monthly mortgage payments, I have excellent credit and have zero debt.

While I could potentially pay cash for a first home, I don't want to liquidate all of that and would rather leave what isn't needed for a down payment invested. But I'm running into the problem that on paper, my DTI is too high to get approved for a mortgage. Are there any ways to get around this issue so that the assets that I do have can be considered and not just my low annual income? 

I really appreciate any advice anyone can provide.

C
  • February 20 2014 - Boston
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Answers (4)

Profile picture for JustinLeffew
For asset-based qualifying, take your total assets (you can typically use 70% of investments) and divide by 360. This is your monthly qualifying income. 

Example: You have $500,000 in a variety of stocks and bonds. $500k x 0.7 = $350k. 350k/360 = $972/month. 

Jumbo and portfolio programs can use different calculations but this is for Fannie Conventional guidelines. 
  • February 21 2014
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Profile picture for shapiroamg
We have a lender that could potentially use asset depletion calculation to qualify, but you may need to put more than 10% down. You can contact me through my profile to discuss and get qualified.
  • February 21 2014
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We can use assets for income but you would need to have a history (reported on your tax returns) of pulling distributions from the assets throughout the year. Do you have a reported distribution history? If not could you set up a monthly distribution moving forward? Contact me via my profile here and let me know.
  • February 20 2014
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Profile picture for daveskow

there are programs that  use  asset based  income for  qualifying ...these  normally require much larger down payments than 20%


1) contact your bank or  institution where you have the  bulk of the assets to ask if they might be able to offer an option  that might  have them cross colaterilizing the property you buy  along with your  asset accounts


2) buy with cash .....keep costs low ...then do a cash out refi to pull cash out to  replenish accounts  once  you get  out of grad school and  become employed full time

  • February 20 2014
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