At PrivateLend.com, eligibility is determined exclusively based on the Applicant’s available liquid assets and assets that can be easily converted into cash without restrictions.
Method 1 | Mortgage Only:
- The total assets after closing must equal at least 125% of the outstanding mortgage debt for which the Applicant holds personal liability. This includes the proposed mortgage(s) on the subject property.
Method 2 | Simplified:
- The total assets after closing should equal at least 110% of the proposed mortgage(s) on the subject property, plus an additional 25% of all other outstanding debt (both mortgage and consumer debt).
Method 3 | Traditional:
- To meet the criteria for this method, total assets after closing should equal the sum of the following:
- 100% of the loan amount
- 36 months of total debt service (excluding the PITIA or PITIA on rented properties with documented rental income for the subject property)
- 36 months of net rental losses on rental properties (excluding the subject property’s PITIA)
Rental Calculation (Method 3 Only):
- Rental properties are evaluated on a net basis, considering 75% of the lease income minus PITIA to determine their impact on debt service. The net rent cannot exceed $0 when determining the impact.
Asset Calculations (All Methods):
- Assets are determined based on the following calculations:
- Cash and cash equivalents: 100% of face value
- Marketable securities (excluding unvested RSUs and Stock options): 80%
- Retirement funds: 70%, unless the Applicant is of retirement age, in which case 80% can be used. If using a retirement account, the Applicant’s ability to access the funds must be documented.
- Cash surrender value of life insurance/annuity: 100%
- Cryptocurrency: 100% if it can be liquidated
- To meet asset requirements, up to 10% of the assets used may come from cash-out proceeds (Methods 2 and 3 only). The balance of any loans secured against financial assets being utilized would be evaluated accordingly.
Contact us to see if you qualify for a mortgage using your liquid assets to qualify.
