What is a Depletion of Assets Mortgage?

An Asset Depletion Mortgage allows the borrower to qualify by deriving an income from assets they currently hold. This program is not meant for a struggling self employed home buyer with no assets and no income on their tax returns. Two years tax returns are still required, and most likely significant assets will be required. But for a solid borrower with $1,000,000 in the bank, this will be a big boost.

Eligible Assets for Asset Depletion Qualifying
Assets that can be used for qualifying include cash equivalents, such as CD's, and funds in checking and savings accounts. Also, trust accounts and investment portfolio's. Retirement accounts like IRA's and 401k's can be used, but only if the borrower is 62 years of age or older.

Example of Asset Depletion Mortgage for 43 year old
Let's say a 43 year old potential California home buyer only shows $5,000 a month income on their tax returns. This results in a debt to income ratio that is too high. But the borrower has $1,000,000 in "liquidable" assets. (new word) The niche portfolio lender will amortize the $1,000,000 using a 5% return over 30 years. This results in an additional $5,365 in monthly income that is added to the borrowers verified income. Using $10,365 a month, the borrower suddenly has the debt to income ratio he needs to purchase his home.

Example of Asset Depletion Mortgage for 73 year old
Lets say a 75 year old is looking at purchasing a home in the Orange County coastal city of Newport Beach, CA. His tax returns reflect income of $5,000 per month, including Social Security income. But he has $1,000,000 in "liquidable" assets. The lender in this case will still use a 5% return, but shortens the amortization to only 10 years. This gives the California home buyer an additional $10,606, for a total qualifying income of $15,606.

Huge for Retired California Borrowers
The lender determines the amortization of the income used to qualify based on the age of the borrower. The amortization can't be more that 30 years, but can't be less than 10 years. The base age is 85. So any borrower 55 years or younger will have their assets amortized over 30 years. Between the ages of 55 and 75, their age is subtracted from 85. So a 62 year old's assets would be amortized over 23 years. (85-62 = 23).

What are San Diego's lowest mortgage rates today? What can we expect from mortgage rates in the 1st quarter of 2012? All Real Estate Professionals & Consumers are advised to stay informed about interest rates and learn THE TRUTH BEHIND MORTGAGE QUOTES to insure the best financial decisions are being made without the distraction of marketing gimmicks. Whether you're a newbee, market analyst (or somewhere in between), keep yourself informed of where mortgage interest rates are going (and why) by subscribing to this daily update.

The Mortgage Street Smarts of where mortgage interest rates are going (and why):

The following information is current as of Thursday 2-2-2012 and will help you understand todays best mortgage rates. If you are a Buyer/Borrower who is still on the fence (or if you are a Real Estate Agent attempting to educate your "on the fence" Buyer), please review these trends and secure an historically low interest rate before it is too late.

The market closed Wednesday with an IMPROVEMENT to pricing (and will typically warrant a pricing adjustment by most Lenders). Wednesday's IMPROVEMENT resulted in a change of 12 basis points (bps).

The following chart shows the market activity for today (hint: upward activity is good, downward activity is bad):

The following chart shows market activity over the past 10 days (hint: green is good, red is bad):

The following chart shows market activity over the past 1 month:

Daily Interest Rate Snapshot (sample of rates from one of the country's largest Lenders...individual pricing will vary based on specific Borrower qualifications): NOTE: This Lender has quoted a 1.00% Origination Fee (1 Point) to accompany this pricing. It bears noting that this chart does not necessarily represent todays best mortgage rates.

Market Commentary

Analyst: Neil Trenerry

FNMA 30-Yr 3.5%

Previous close 103.969

Opened Up 0.06 @ 104.031

Key Economic Data:

EUR / USD 1.3117 Down 0.0025
USD / JPY 76.1600 Down 0.1100
GBP / USD 1.5823 Down 0.0010

Oil 96.60 Down 1.01

Gold 1,749.20 Down 0.30

Key Economic News:

Unemployment Claims:

Claims for jobless benefits fell last week, a sign the labor market is improving. Applications for unemployment insurance payments dropped by 12,000 to 367,000 in the week ended Jan. 28, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 371,000. Companies are slowing the pace of firing as the world’s largest economy picks up, a necessary step toward bigger gains in employment. Economists forecast a Labor Department report tomorrow may show employers boosted payrolls in January and the jobless rate held at an almost three-year low. Jobless claims were projected to decrease from 377,000 initially reported for the prior week, according to the Bloomberg survey. Estimates ranged from 360,000 to 384,000. The Labor Department revised the previous week’s figure up to 379,000.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 43,100 to 3.5 million in the week ended Jan. 14.

Productivity Rises. The measure of worker output per hour increased at a 0.7 percent annual rate, following a 1.9 percent gain in the prior three-month period. Expenses per employee climbed at a 1.2 percent rate after falling 2.1 percent in the third quarter.

Advice:

With unemployment coming just under expectations, and the dollar improving. I would expect the market to hold.

My position on MBS stays long.

Trusted Industry Advisor

The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason E Gordon. As a Certified Mortgage Planning Specialist (CMPS) Certified Distressed Property Expert (CDPE) and Certified Mortgage Coach (CMC), Jason E Gordon utilizes his advanced training to examine a prospective Client's complete financial picture, while carefully listening to their overall goals. If it is mutually agreed that a new loan makes sense to pursue, Jason strives to make the entire loan process as seamless as possible. He truly believes that providing open communication and patient educational guidance to his Clients and Business Alliances has been a pivotal component to building his business, while enhancing his reputation in the Mortgage Industry as a Trusted Advisor. Visit www.jasonegordon.com or www.ApprovingSD.com or more information.

Click here for daily mortgage interest rate updates and projections for San Diego's lowest mortgage rates

15th Annual Sage & Songbirds
Festival and Garden Tour

If you feel a need to get out of the city for a while, a great place to go is Alpine, just 20 miles east of your Mission Valley condominium.

Alpine is a small community of just over 14,000 residents. It is located in the East San Diego County mountains at an elevation of 1,841 feet above sea level, about 1,841 feet higher than your Mission Valley condominium if you're on the ground floor. It's typically hotter during the day and colder at night than what you experience in Mission Valley.

Each year for the past fourteen years the folks in Alpine have been having a Sage & Songbirds Festival and Garden Tour, and 2012's event is the weekend of May 4-6. This year's theme is "Waterwise & Butterflies."

Put it on your calendar! The fauna and flora in a mountain community are much different from Mission Valley.

On May 1, 1998, the National Wildlife Federation designated Alpine as America’s first Community Wildlife Habitat. You'll understand why when you visit Alpine, specifically the Festival and Garden Tour.

Arguably the highlight of each year's event is the butterfly release when hundreds of native butterflies are released at noon on both Saturday and Sunday. Admission is free to the butterfly release. There is an admission fee for the Garden Tour but it has not been posted at the web site yet.

For more information and updates, visit the web site at Chirp.org.

♪♫ ♫♪

1. San Diego Mission Valley condos for sale — Mission Bellwood (January 16, 2012)
2. Out & About San Diego — Ever wondered what a condemned home looks like?
3. San Diego Mission Valley condos for sale — Mission Greens (January 15, 2012)
4. Out & About San Diego — 50% discount on admission to Birch Aquarium
5. San Diego Mission Valley condos for sale — The Courtyards (January 12, 2012)
6. Out & About San Diego — Petco WALK.RUN.WAG. benefitting the Petco Foundation
7. San Diego Mission Valley condos for sale — Presidio Place (January 11, 2012)
8. San Diego Mission Valley condos for sale — Mission Village (January 11, 2012)
9. Out & About San Diego — The Three J's perform their final Debussy concert
10. San Diego Mission Valley condos for sale —River Scene (January 10, 2012)
11. San Diego Mission Valley condos for sale — Rio del Oro (January 9, 2012)
12. San Diego Mission Valley condos for sale — Mission Gate (January 8, 2012)
13. San Diego Mission Valley condos for sale — River Colony (January 7, 2012)
14. My new and improved Blue Boy
15. San Diego Mission Valley condos for sale — Union Square (January 6, 2012)

Are you looking for a Zero Down home loan in Alpine CA? USDA home loans require no money down and closing costs can be paid by the seller making USDA home loans a great alternative to FHA financing. The program is available for properties considered to be in a rural area such as Alpine, California. There are many benefits to USDA Home Loans which buyers should be aware of while considering their financing options.

The USDA home loan is a true zero down payment program. In addition, USDA home loans have no mortgage insurance which can result in substantial savings when comparing USDA home loans to FHA home loans:

USDA vs FHA $250,000 Sales price30 Year Fixed 4.25%

Another benefit to the USDA home loans is that it allows for closing costs to be paid in two different ways. The easiest way is to have the seller pay the closing costs. USDA home loans allow for the seller to pay up to 6% of the sales price towards closing costs. There is another way to pay closing costs. If the appraisal on the property comes in higher than the sales price, then you can finance them into the loan amount. Either way is acceptable but in today's market, having the seller pay for closing costs is not uncommon.

Some other key features of USDA home loans are as follows.

• You do NOT need to be a first time home buyer.
• There are no sales price or loan limits when considering a property. Although certain properties are not allowed such as one's with second structures such as barns or granny flats. However, the program requires each property to be in a rural area. It is best to contact me to see if the property that you are considering is in a qualified area.

One caveat to USDA home loans is that it does have very specific income limits base upon family size for each county. However, the income limits are fairly high and generally do not limit one's ability to purchase. For USDA home loans in Alpine California, contact me directly via email for income limits.

If you are considering purchasing a home consider USDA home loans in Alpine California. Contact me directly so we can review your qualifications and USDA home loans in greater detail. I'm sure that you will agree that this is a great program for those of you considering purchasing in a rural area.