ASSET BASED MORTGAGE NEW JERSEY

Purchase or Refinance:

• No income verification
• No bank statements
• No DTI calculated
• No employment
• No tax returns
• No 1099’s
• No W2’s
• 1 month bank statement required with 640 credit score
• 2 months bank statements required with 600 credit score

Property Type:

• Single Family
• 2 Unit
• 3 Unit
• 4 Unit
• Condominium
• Non-Warrantable Condominiums
• Townhouse
• Rural
• Modular
• Primary & Second homes

Purchase or Refinance:

• Minimum 600 credit score
• Purchase & rate/term refinance up to 85% LTV
• Cash-out refinance up to 80% LTV
• 5/6 ARM, 10/6 ARM, 30 Yr Fixed (Interest Only), 30 Year Fixed
• 3 months reserves required

What is an Asset Based Mortgage?

An asset based mortgage is a type of home loan where approval is primarily based on your assets instead of your income. Unlike conventional loans that require W-2 forms, tax returns, or pay stubs, this mortgage leans on what you already own—stocks, bonds, cash reserves, retirement accounts, or real estate—to determine your creditworthiness.

Think of it this way: Instead of asking, “How much do you make each month?” the lender asks, “What do you have in the bank?” If you can show sufficient liquid assets or investments, you may qualify for a mortgage without the traditional income verification hurdles.

With home prices often well above the national average, asset based mortgages provide a crucial lifeline for buyers who may not fit the mold of a traditional borrower.

How It Differs from Traditional Mortgages

The key difference lies in documentation and qualification:

• Traditional Mortgage: Requires proof of income through W-2s, tax returns, and employment verification.

• Asset Based Mortgage: Evaluates your liquid assets to ensure they can cover the mortgage payments plus reserves.

Another important distinction is how underwriting is approached. Asset based lenders are typically more flexible, considering a broader range of financial indicators. This is perfect for retirees with large savings, self-employed professionals with fluctuating incomes, or real estate investors.

The Appeal of Asset Based Lending

Why New Jersey Homebuyers and Investors Choose Asset Based Mortgages

There’s a growing demand for non-traditional lending in New Jersey, and asset based mortgages are leading the charge. Here’s why they’re so appealing:

1. Bypass Income Requirements: In a state where many professionals are self-employed, freelancers, or entrepreneurs, proving steady income can be a challenge. Asset based loans remove that hurdle.

2. Flexibility: Whether you’re buying a primary residence, a vacation home in the Shore area, or an investment property in Jersey City, asset-based loans adapt to your goals.

3. Speed: Because there’s less red tape, the approval process can be significantly faster, which is essential in a competitive real estate market like New Jersey’s.

Let’s not forget—many buyers in New Jersey operate multiple businesses or manage income from multiple investment streams. These buyers don’t always have clean tax returns or regular paychecks. Asset based lending lets them use what they have without jumping through hoops.

Ideal Candidates for This Type of Loan

Asset based mortgages aren’t for everyone. They’re tailored for individuals who are asset-rich but may not show a high monthly income on paper. Here’s who typically benefits the most:

• Self-Employed Individuals: Freelancers, consultants, small business owners.

• Retirees: Those living off retirement accounts or investment portfolios.

• High-Net-Worth Individuals: People with significant investments, even if they have little to no current income.

• Real Estate Investors: Especially those leveraging rental income or equity from other properties.

If you fall into one of these categories and are buying or refinancing in New Jersey, an asset based mortgage could be a game-changer.

Key Features of an Asset Based Mortgage New Jersey

Income Documentation Requirements

One of the biggest perks of asset based mortgages is the reduced documentation burden. Lenders typically don’t require:

• Pay stubs

• Tax returns

• W-2s

• Employment verification

Instead, they ask for:

• 1-2 months of bank statements

• Brokerage statements showing stocks, mutual funds, or bonds

• Retirement account balances (401k, IRA)

• Proof of other owned assets like real estate or businesses

Credit Score Considerations

While asset based mortgages are more flexible, they’re not a free pass. Most lenders still want to see a credit score of at least 600, though better rates come with scores over 700.

In New Jersey, where housing is competitive, a higher score can help you secure more favorable loan terms. Some lenders may even offer jumbo asset-based loans for luxury properties, provided your credit profile is solid.

Asset Types Considered in Approval

Not all assets are created equal. Here’s what typically qualifies:

• Liquid assets: Cash in checking/savings, money market accounts.

• Marketable securities: Stocks, bonds, mutual funds.

• Retirement accounts: 401(k), IRA, SEP-IRA (some lenders may discount these based on age and penalties).

• Business holdings: In some cases, especially if they can be liquidated quickly.

Assets that don’t usually qualify include personal property, collectibles, or assets with no clear market value.

Asset Based Mortgage New Jersey Process

Step-by-Step Loan Application Process

If you’re interested in an asset based mortgage in New Jersey, here’s what the process typically looks like:

1. Initial Consultation: Speak with a mortgage broker or lender who specializes in asset based loans.

2. Asset Documentation: Gather your statements—bank, brokerage, retirement, etc.

3. Pre-Approval (Purchase): The lender calculates your asset based income and offers pre-approval.

4. Property Selection (Purchase): Find the home or property you wish to buy or refinance.

5. Underwriting: The lender reviews the asset documentation, appraises the property, and verifies reserves.

6. Closing: Once approved, sign the papers and close on your (new) home.

Timeline for Approval and Closing

Compared to traditional mortgages, asset based loans can be quicker, particularly because there’s less income verification involved. Here’s a rough timeline:

• Underwriting: 7–10 days

• Appraisal and closing: 15–21 days total

In a hot New Jersey market, where time is often of the essence, this speed can be a significant advantage.

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