I've got $, can I use that as income?
Happy Hump Day from Wintery Montana!
A question I get often might have a different answer than you might expect. Let's imagine you are a trust fund baby (fun, huh?!) or a Kardashian but you don't have a job because, why would you? You have buckets of money that you can live on for the rest of your life and you would rather weave baskets or volunteer or surf or ski most of your days. That would be AWESOME! Who wants a regular J.O.B. (Joyless Occupational Bondage) when you are set for life with money?!
BUT when it comes to qualifying for a mortgage, (yes, even rich people get mortgages) just having skads of cash at your fingertips will not you get you an instant approval on your loan. The common sense in mortgage fell off decades ago, even if you have enough cash in your trust account to pay off the mortgage twice over, it won't work as income, unless you fit in the little box.
Fannie Mae and Freddie Mac require that you be 62 years old in order to use what is called Asset Depletion as income AND they do their math differently, of course. Fannie says you have to take the net total assets and divide it by 360 months while Freddie says you can divide the asset total by 240 months which of course is better for your income calculation.
But what happens if you AREN'T 62? Again, I'm a Kardashian HAHA. Well, we have investors who do their math a little bit better, ok, A LOT better! I have investors who will take the net assets and they will divide them by 120 months or even 60 MONTHS in some situations AND you can be any age! Isn't that crazy!? You and I both know that when you take an asset and only have to divide it 60 ways that your monthly income is going to a lot bigger than if you have to divide it 360 ways!
You would be surprised how many folks nowadays fall into this income type. I love the tools that being a broker offers. We work with investors that are looking for ways to say YES! I just love that. We are personally invested in your success as a homeowner.
Do you have a funky scenario? Let's chat! Not so funky? Give me a call or shoot me an email anyway!
Have a great rest of your week!
