What is an Asset Qualifier Loan?

An Asset Qualifier Loan allows you to buy a home using your liquid wealth—savings, stocks, 401(k)s, or crypto—to qualify for a mortgage rather than relying on standard pay stubs or tax returns.

Key Program Features

No pay stubs, W-2s, or employer calls.

Qualification is based on your total assets, not monthly income.
Applies to primary residences, vacation homes, and investment properties.

Uses 100% of your account values regardless of your age.

2. Ignoring Closing Costs

Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.

To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.

How Qualification Works: The 125% Rule

To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.

After covering your down payment and closing costs, your remaining liquid assets must equal at least 125% of your mortgage debt.

{Required Assets} = {Loan Amount} x 1.25

Example Scenario:

Home Price: $450,000 (20% Down Payment = $90,000)

Loan Amount: $360,000

Required Remaining Assets: $360,000 x 1.25 = $450,000

Your Total Assets: $595,000 (Checking, Savings, Brokerage, 401k)

Remaining After Down Payment & Closing: $595,000 - $100,000 = $495,000

Result: Approved. Your $495,000 exceeds the $450,000 requirement.

Eligible vs. Ineligible Assets

Eligible
Checking & Savings Accounts
Brokerage & Stocks
401(k)s & IRAs (100% of value)
Crypto (100% if liquidated; 50% for unliquidated BTC/ETH)

Ineligible
Personal Vehicles
Artwork & Collectibles
Gift Funds for Reserve (Allowed for Down Payment)

Who Benefits Most?

Business owners with heavy tax write-offs.
High-net-worth individuals avoiding unnecessary taxable withdrawals.

Entrepreneurs moving from W-2 jobs into startups.

Individuals living off structured settlements or liquidated business assets.

4. Taking on Too Much Debt

Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.

To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.

.Barrett Financial

.NMLS# - 1660690 | 2701 East Insight Way, Suite 150, Chandler, AZ 85286

NMLS Consumer Access Link:

Notice To Texas Loan Applicants: Consumers wishing to file a complaint against a mortgage banker, or a licensed mortgage banker residential mortgage loan originator, should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, TX 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov

A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov

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