Asset Rich, “Qualified Income” Poor

More and more we see clients that are asset rich yet “qualified income” poor, which just means that they have done a good job saving and accumulating wealth, and now live off their accumulated wealth and investments. The definition of “qualified income” specifically pertains to a calculation based off their tax returns as reported usable annual income per banking guidelines. Keep in mind there are several ways to create additional income outside of what your tax returns show with products like Structured Distribution or Asset Allocation loans. These loans specifically take asset accounts and allow for a calculation that yield additional monthly income that can be used to qualify. 

Another great solution for clients to buy homes without having a high level of qualified income is to utilize products like the Departing Residence option. These loans can help leverage a clients existing home and the equity in that home to purchase a new home prior to selling the existing home. There are specific details and guidelines each of the above loan options requires, but they are far too detailed to explain in this piece. Trust that if your Mortgage Advisor is not aware or capable of using these products, then they simply are selling around them and it’s time to find a new advisor. Lastly, we can always find private investors to help bridge the gap; they are the most expensive options, but also the most convenient and swift closing in just 7-10 days. 

At the end of the day, there are still several great solutions for those who have been told they don’t qualify.