can equity holdings count toward mortgage eligibilty?

Asked by Dazedmose, Indian Wells, CA Tue Feb 28, 2012

Where annual income, retired, is only about $120,000 making it difficult to qualify for second
home mortgage, can equity holdings of near $1,000,000 be factored in for qualifying for
new mortgage on second home???

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Uriah Anders…, Agent, Palm Desert, CA
Fri May 17, 2013
There are a number of new lending options returning to the market that may be able to meet your financing needs.

Please feel free to call me @ 760-585-8328

Uriah Anderson
Branch Manager IFG Mortgage
NMLS #272891
0 votes
Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Thu Mar 1, 2012
There are opportunities for asset based loans (certainly more than there were a year or two ago). These are specialty (or portfolio) products that require research to determine the lending source who most closely matches the lenders need with those of your own. This is definitely not a situation that can be "preapproved" via the advice columns; however, you may have more options than expected (obviously, not with a major bank...this would be a brokered loan option).

Contact me via my profile if you would like me to do some specific research for you. Best of luck
0 votes
, ,
Thu Mar 1, 2012
FNMA's automated underwriting system does take assets into account. But you do need enough income. It sounds like you should have enough income, my guess is that your problem is debt. I would have to go over the numbers but I think if you are just a little bit creative, you should be able to knock that one out of the park.
0 votes
Dan Tabit, Agent, Issaquah, WA
Tue Feb 28, 2012
Debt ratios are not hard and fast in many situations. Your assets will be factored into the lenders decision. Assuming you have great credit and a reasonable down payment I would suggest you meet with a local lender and apply. Once your application has been run through an automated underwriting program you will know what conditions you may need to meet and if you can get approved.
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Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Tue Feb 28, 2012

There are two ways to approach this. If the equity holdings pay dividends or provide capital gain income, then you can use a three-year average of this in the qualification. Alternatively, you can also sometimes do what's known as an "asset depletion" or "pledged asset" backed qualification. These loans will not have terms on par with conventional loans, but they sometimes do offer a solution where there otherwise may be none.

If you need help with either of these approaches, I am happy to help.

Rob Spinosa
0 votes
Gail Mcquary, Agent, Indian Wells, CA
Tue Feb 28, 2012
I would think it would depend on the value of the 2nd home #1. Any second home today, if you're going for financing requires 40-50% down. #2. Is the equity holding liquid? #3. My gut feeling is that the equity holding cannot be a factor for quaification.
Gail McQuary
0 votes
Carl Henker, , 95928
Tue Feb 28, 2012
Equity holdings that gererate an incme mybe of help in qualifying. Your qualification is based on the level of payments your income will support and assets contribute to a stronger file but don't help the debt to income ratio without producing an income stream.
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