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Non-QM 101: Asset Qualifier Loans

July 5, 2023
Learn how LendSure’s Asset Qualifier Program can help your borrowers qualify for a mortgage by using assets instead of income.

As a solution provider in today’s market, you likely see a wide variety of borrowers.

Some are tailor-made for traditional lending, but others are not so much. If you’re working with the latter, don’t fret – you still have strong financing options for your clients. You just have to partner with the right lender. An instance of a borrower who might require an alternative loan program is an individual possessing abundant assets but insufficient income. At LendSure, we offer an Asset Qualifier solution, a flexible loan program that analyzes a borrower’s personal balance sheet instead of what they’re generating monthly. This differs than standard Asset Depletion programs in that the total qualifying assets are divided by 60 months (instead of 120), essentially doubling the monthly qualifying income.

Ready to start offering these types of loans? Here’s everything you need to know about our Asset Qualifier Program:

What is an Asset Qualifier Loan?
Asset Qualifier Loans are an alternative way for borrowers to qualify for mortgage financing. Instead of only examining the usual documents (think W2s and tax returns), we look at the borrower’s personal balance sheet to get a complete picture of their financial position.

This type of solution is ideal for borrowers who may not have a steady flow of monthly income but have other forms of sizable assets (think stocks and bonds, cash equivalents, and retirement accounts) that can help them qualify for a loan.

Take, for example, a retired individual who no longer earns a monthly income, but has assets that have accumulated over the years. Instead of their income, they can use a retirement account, to qualify for financing. Here’s a short video explaining LendSure’s process.

How Can You Qualify For Asset-Based Lending?
Speaking of qualifying – the way borrowers qualify for these types of loans is easy. They just need to provide proof of their assets.

Alternatively, traditional lenders generally determine eligibility by analyzing the borrower’s monthly income. Asset-based lending ultimately offers borrowers more wiggle room when financing a property.

At LendSure, we focus on three types of assets: cash and cash equivalents, stocks and bonds, and retirement accounts. With these three types, we’re able to conduct a thorough evaluation and determine their total qualifying assets to see whether or not a borrower can hold down their mortgage.

How Do Lendsure’s Asset Qualifier Loans Work?

LendSure gives the borrowers credit for 100% of their cash and cash equivalents, 80% of their stocks and bonds, and 70% of their retirement accounts. The way we underwrite these loans also allows for a larger qualifying monthly income. Case in point: After adding all the assets together, we divide the total amount by 60 to calculate the monthly income the borrower is eligible for. Standard Asset Depletion programs usually divide the assets by 120 months, so our Asset Qualifier program essentially doubles the monthly income qualifying amount.

Here’s an example of our calculation:

Asset Type Amount Percentage Used Qualifying Amount
Cash Equivalents $420,000 100% $420,000
Stocks & Bonds $500,000 80% $400,000
Retirement Accounts $700,000 70% $490,000
    Total Qualifying Assets $1,310,000

The total qualifying assets here add up to $1,310,000. After dividing that by 60 months, you get $21,833 of monthly income allowance.

Asset-based lending is ultimately a smart option if you’re working with borrowers who can’t provide qualifying income, but have a high net worth and large assets.

The LendSure Way

It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers and ratios, and data to consider, but we know that behind every file, there’s an individual with unique circumstances seeking a loan.

 We work hard to offer our commonsense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently owned property.

Are you ready to grow your business? Conforming loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, tools, support, and guidance they need in order to say “yes” to more of their clients. This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!

Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.

Contact Us: (888) 707-7811