Assets can make all of the difference in qualifying for a San Mateo mortgage loan. Your assets can be the ultimate compensating factor to offset your income and/or lower credit scores. This can also be the biggest obstacle to overcome as this is where your down payment and closing cost will come from. Also, depending on which program and lender you go with, 2 months up to 12 months of asset reserves may be required to close the loan. This means a lender would like to see 2 to 12 months of your principal, interest, taxes and insurance in some sort of account (checking, savings, stocks, bonds, 401k or other investment accounts) or source (car, antiques or something else of value that can be sold for a profit).
As I explained in my last few posts, the CIA of Lending Series, all is not lost if the A segment of your total CIA is lacking. There are other viable alternatives and sources to compensate for your assets, such as:
- Gift funds from a family member to use for down payment
- Seller paying a portion or all of your closing costs
- FHA financing allowing just a 3.5% down payment
- San Mateo first time home buyer loan programs with 100% financing
- Payment and interest deferred 2nd loans to cover down payment and or closing costs
- Selling or refinancing existing assets such as a car or boat
- Non-occupying co-borrowers
- Borrowing against a 401K or IRA
- Pledged Asset Mortgages (borrowing against stock, bonds or CD’s without liquidating them)
As you can see, you do have options, but note that some of these alternatives may have tax ramifications as well, so you may want to get your tax advisor and financial advisor into the mix before making any final decisions.
I hope my series on the CIA of Lending has been helpful. If you want to see how far your personal CIA will take you in a home purchase, don’t hesitate to contact me at (650) 520-0915 or by email at info@SanMateoMortgageBlog.com. I am always available to provide you with additional insight on your financial matters.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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