Mortgagerateslocal.com – Are you looking for a way to finance your dream home without having to prove your income? Do you have a substantial amount of assets that you can use as collateral for a loan? If so, you might want to consider asset based mortgage lenders.
Asset based mortgage lenders are lenders that offer loans based on the value of your assets. This means that you can qualify for a loan even if you are self-employed, retired, or have irregular income.
Asset based mortgage lenders can help you get the cash you need to buy or refinance a property, without having to go through the hassle of providing income documentation.
We will explain what asset based mortgage lenders are, how they work, and what are the benefits and drawbacks of using them. By the end of this post, you will have a better understanding of asset based mortgage lending and whether it is a good option for you.
What are Asset Based Mortgage Lenders?
Asset based mortgage lenders are lenders that use your assets as income to determine your eligibility and loan amount. Assets are anything that you own that has value, such as cash, stocks, bonds, mutual funds, retirement accounts, certificates of deposit, and so on.
Lenders will calculate your loan amount based on a percentage of your assets’ value, usually between 70% and 100%. For example, if you have $500,000 in liquid assets, you could qualify for a loan of up to $350,000 (70% of $500,000) or up to $500,000 (100% of $500,000), depending on the lender’s criteria.
Lenders do not require you to provide income documentation, such as pay stubs, W-2s, or tax returns. Instead, they will verify your assets by asking for bank statements, brokerage statements, or other proof of ownership. They will also check your credit score and history, but they will not use your debt-to-income ratio as a factor for approval.
How do Asset Based Mortgage Lenders Work?
Asset based mortgage lenders work differently from traditional mortgage lenders, who base their decisions on your income, credit, and debt. Here are the main steps involved in getting a loan from an asset based mortgage lender:
- Apply for a loan. You will need to fill out an application form and provide some basic information about yourself, your assets, and the property you want to buy or refinance. You will also need to authorize the lender to check your credit report and score.
- Submit your asset documentation. You will need to provide the lender with proof of your assets, such as bank statements, brokerage statements, or retirement account statements. The lender will verify the value and ownership of your assets and calculate your loan amount based on a percentage of your assets’ value.
- Get approved for a loan. The lender will review your application and asset documentation and decide whether to approve you for a loan. The lender will also determine your interest rate and loan terms, such as the repayment period, the type of loan (fixed or adjustable), and the fees and closing costs.
- Close the loan. Once you are approved for a loan, you will need to sign the loan documents and pay any fees and closing costs. The lender will then disburse the loan funds to you or to the seller of the property, depending on the purpose of the loan.
What are the Benefits of Asset Based Mortgage Lenders?
Asset based mortgage lenders offer several benefits for borrowers who have a lot of assets but not a lot of income. Here are some of the main advantages of using asset based mortgage lenders:
- You can qualify for a loan without income documentation. If you are self-employed, retired, or have irregular income, you might have trouble proving your income to traditional mortgage lenders. This do not require you to provide income documentation, so you can qualify for a loan based on your assets alone.
- You can get a larger loan amount. If you have a lot of assets, you can get a larger loan amount from asset-based mortgage lenders than from traditional mortgage lenders. Traditional mortgage lenders will limit your loan amount based on your income and debt, while asset based mortgage lenders will base your loan amount on your assets’ value.
- You can get a lower interest rate. If you have a good credit score and history, you can get a lower interest rate from asset based mortgage lenders than from traditional mortgage lenders. Asset based mortgage lenders will consider your assets as a form of security for the loan, which reduces their risk and allows them to offer you a lower interest rate.
What are the Drawbacks of Asset Based Mortgage Lenders?
Asset based mortgage lenders also have some drawbacks that you should be aware of before applying for a loan. Here are some of the main disadvantages of using asset based mortgage lenders:
- You will need to have a lot of assets. Lenders will only lend to borrowers who have a substantial amount of assets that they can use as collateral for the loan. If you do not have enough assets, you might not qualify for a loan or get a very small loan amount.
- You will need to have liquid assets. Lenders will only accept assets that are liquid, meaning that they can be easily converted into cash. Assets that are not liquid, such as real estate, art, jewelry, or collectibles, will not be accepted by asset based mortgage lenders.
- You will need to have verifiable assets. Lenders will only accept assets that can be verified by a third party, such as a bank, a broker, or a custodian. Assets that are not verifiable, such as cash under the mattress, personal loans, or gifts, will not be accepted by asset based mortgage lenders.
How to Find the Best Asset Based Mortgage Lenders?
If you are interested in getting a loan from an asset based mortgage lender, you will need to do some research and comparison shopping to find the best lender for your needs. Here are some tips on how to find the best asset based mortgage lenders:
- Compare different lenders. You should compare different asset based mortgage lenders and see what they offer in terms of loan amount, interest rate, loan terms, fees, and closing costs. You should also check their reputation, customer service, and reviews from previous borrowers.
- Ask for referrals. You can ask for referrals from your friends, family, or colleagues who have used asset based mortgage lenders before. They can share their experiences and recommendations with you and help you find a reliable and trustworthy lender.
- Consult a mortgage broker. You can consult a mortgage broker who specializes in asset based mortgage lending. A mortgage broker can help you find the best lender for your situation, negotiate the best deal for you, and guide you through the application and closing process.
Best Asset-Based Mortgage Lenders Recommendation
If you are looking for a reputable and reliable asset-based mortgage lender, you might want to consider the following options. These are some of the best asset-based mortgage lenders in the market, based on their loan products, rates, terms, fees, and customer reviews.
1. New Silver Lending
New Silver Lending is one of the top asset-based lenders providing asset-based loans to real estate investors for fix and flip projects, rental properties, and ground-up construction loans. New Silver Lending offers competitive rates, flexible terms, fast approvals, and no income verification.
New Silver Lending also has a user-friendly online platform that allows you to apply, track, and manage your loan from anywhere. New Silver Lending is a great choice for experienced and novice investors alike.
2. ABL Lending
ABL Lending is another leading asset-based lender that specializes in hard money loans for real estate investors. ABL Lending offers loans for fix and flip, buy and hold, new construction, and cash-out refinance projects.
ABL Lending has low rates, high loan-to-value ratios, no prepayment penalties, and no income verification. ABL Lending also has a dedicated team of loan officers and underwriters that provide personalized service and support throughout the loan process. ABL Lending is a trusted and reputable lender that has funded over $500 million in loans.
3. Lending One
Lending One is a nationwide asset-based lender that provides loans for residential and commercial real estate investors. Lending One offers loans for fix and flip, rental, multifamily, and bridge projects. Lending One has competitive rates, long terms, high loan amounts, and no income verification.
Lending One also has a streamlined online application and approval process that can get you funded in as little as 10 days. Lending One is a lender that values customer satisfaction and loyalty.
4. Lima One Capital
Lima One Capital is a premier asset-based lender that offers loans for various types of real estate investment projects. Lima One Capital offers loans for fix and flip, rental, multifamily, new construction, and short-term bridge projects.
Lima One Capital has low rates, flexible terms, no hidden fees, and no income verification. Lima One Capital also has a simple and fast online application and closing process that can get you funded in as little as 14 days. Lima One Capital is a lender that prides itself on honesty, integrity, and transparency.
5. Kiavi
Kiavi is a unique asset-based lender that offers loans for real estate investors based on their credit score and assets, rather than their income. Kiavi offers loans for fix and flip, buy and hold, and cash-out refinance projects.
Kiavi has low rates, long terms, no origination fees, and no income verification. Kiavi also has an innovative online platform that allows you to apply, upload documents, and get approved in minutes. Kiavi is a lender that aims to make real estate investing easy and accessible for everyone.
Conclusion
Asset based mortgage lenders can help you finance your dream home without having to prove your income, as long as you have a lot of liquid and verifiable assets. Asset based mortgage lenders have their pros and cons, so you should weigh them carefully before applying for a loan. You should also compare different lenders and shop around for the best deal.
