No W2? What’s a high net worth mortgage customer to do?

Believe it or not, it can be difficult for high net worth people to qualify for a traditional mortgage. The problem? No tax forms confirming a steady paycheck. Perhaps they are self-employed or retired and therefore unemployed. They could be a serial entrepreneur who has just launched a new start-up or the owner of a successful restaurant chain whose wealth is tied up in the business.

These borrowers are certainly credit-worthy and deserve to have the mortgages they want and need. Their predicament inspired us to tap our ingenuity reserves and create our new asset-based mortgage qualifying programs.

Offered to borrowers whose FICO scores and loan-to-value align with our Expanded Prime products, Deephaven’s asset utilization programs qualify borrowers based on their accumulated financial holdings.  These may include personally held stocks, bonds, mutual funds, vested amounts of a retirement account and personal bank accounts.  Using these assets, our in-house underwriters calculate the borrower’s ability to meet the down payment and reserve requirements, make 60 months of monthly debt payments and pay off the mortgage. No income disclosure on a 1003 form necessary.

A borrower’s personal assets can be applied according to two difference programs:

  1. Total Asset Calculation— For borrowers whose assets cover the new loan amount, down payment, closing costs, required reserves and five years of current monthly obligations.
  2. Debt Ratio Calculation—At minimum, borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1 million in qualified assets, both of which must be net of down payment, closing costs and required reserves. Monthly income is calculated by dividing net qualified assets by 84 months.

Additional flexibility in the loan structures enable more borrowers to take advantage of our asset utilization programs. For example, borrowers can use a portion of their assets to cover the down payment instead of cash.  Deephaven simply excludes them from the balance before analyzing the full portfolio.

Our asset utilization programs are the most recent examples of Deephaven’s pro-borrower philosophy.  Taking into account a borrower’s entire financial picture provides a fairer and truer understanding of their wealth.  Plus, it just makes sense.