Asset-based income program allows buyer to purchase new home

Mortgage adviser: Tom Banducci. Property type: Single-family home in Forestville. Purchase price: $550,000. Loan amount: $376,530. Loan type: 7/1 adjustable rate mortgage. Loan rate: 5.434 percent with no points. Backstory: Tom Banducci’s client was referred by her brother after being denied at another lender. The client had an unconventional income stream that included rental properties and dividend/interest income from a substantial investment portfolio.

While many people would love to have this “problem,” the client’s tax returns did not show enough income to help her qualify for a Bay Area home purchase using traditional underwriting guidelines. Paying cash for a home was an option, but this would mean liquidating a large portion of her investment portfolio. Being a direct lender and broker, Guaranteed Rate offers loan programs for many different situations.

One option Banducci researched was a loan program that offered an out-of-the-box solution for high net-worth clients whose income is not derived from traditional employment streams.

Asset Depletion programs allow underwriters to evaluate liquid assets and assign a conservative income stream from those assets over a specified time frame. By using this program, Banducci was able to qualify his client for a purchase mortgage to buy her dream home, and she was able to keep her investment portfolio largely intact.

Tom Banducci, Guaranteed Rate,

(415) 694-5522, tom.banducci@rate.com.