Asset Based Mortgages: No Distributions, No Tax Returns, No Problem!
Let’s clarify one thing right off the bat: Asset Based Mortgages are not hard money loans. They’re government regulated and 30-year fixed mortgages—no balloon payments or negative amortization and primary / 2nd homes have no prepayment penalties.
There are many reasons people prefer to take a mortgage even though they have enough money to pay cash: prefer not to sell investments due to stock market volatility, prefer to keep savings for other investment opportunities, or simply just prefer to keep savings intact. Whatever the reasons, using a mortgage vs depleting lifetime savings can be a valuable tool.
Typical mortgages for these scenarios require tax returns, historical and ongoing distributions, or even increases to the distributions. But this approach seems a bit counterintuitive. If someone has saved their whole life—proven they can save and manage money—and now wants to borrower funds, why so many hoops? Why make a person prove they can manage money after they’ve already proven? Sounds a bit insulting and unnecessary.
There’s good news! Some lenders actually do have commonsense mortgage options that don’t overlook people who’ve proven their ability to make good money decisions. Enter Asset Based Mortgages.
Plain and simple? Prove you have the money to pay off the home completely and still have money remaining. That’s it! No tax returns, no historical distributions, no increased distributions, no pledging of savings, no on-going balance reviews. Just prove you have the money.
You can use these mortgages to purchase primary homes, 2nd homes, or rental homes, and they can even be used to refinance homes.