If you’re a business owner considering a luxury real estate purchase, the financing you will choose is likely top of mind. You have probably already realized that traditional mortgage options don’t always work in your favor. Your income might be tied up in your business, you may not take a regular salary, or your tax returns may not reflect your true earning power. That’s where asset-based lending can be a game-changer.
Over many years, we’ve helped our clients find the mortgage that aligns with their needs and goals, developing an expertise at finding solutions for borrowers whose buying power may not be fully displayed on a W-2. Let’s talk about what asset-based lending is, how it works, and why it could be the perfect solution if you are an entrepreneurs or self-employed professional looking to invest in high-end real estate.
What is Asset-Based Lending?
Asset-based lending is a type of mortgage financing that allows you to qualify based on your assets, rather than your income. Instead of evaluating W-2s, pay stubs, or even tax returns, we assess the strength and liquidity of your financial assets, such as investment portfolios, cash reserves, retirement accounts, or other owned properties.
In other words, if you have a high net worth, but not typical W-2 income, this financing route allows you to leverage those assets to purchase a luxury property.
There are multiple different ways to do this. Bank statement loans, or qualifying for a loan with profit and loss statements, are just two of the ways we can offer mortgages. (even jumbo loans up to $6 million) to our borrowers who don’t have traditional W-2 income.
Why Do Business Owners Benefit from Asset-Based Lending?
Traditional loans usually require:
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Two years of W-2s or consistent pay stubs
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Tax returns that show high taxable income
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A strong debt-to-income ratio (DTI)
As a business owner, these requirements can be difficult to meet—even if you’re financially secure and in a great position to invest in luxury real estate. That’s why asset-based lending is a smart strategy for buying luxury properties.
Here’s how it benefits you:
Leverage Your Wealth without Liquidating Assets
You don’t need to sell stocks or pull from retirement accounts. We can look at your total asset value as proof of financial strength, allowing you to buy your dream home without disrupting your investment strategy.
Skip the Income Documentation Headache
If you don’t have a W-2 to submit, showing proof of income can be a headache. With asset-based lending, no W-2 is no problem. Asset-based loans remove the need for income verification, which makes them ideal for self-employed buyers with complex tax situations.
Unlock Jumbo Loan Options
The more you can borrow, the more you can invest, and the more rapidly you can grow your net worth. This means a jumbo loan can be your ideal choice. The luxury properties you want often require large loan amounts. We frequently offer asset-based loan approval for jumbo mortgages to make it easier to finance high-end homes in competitive markets.
More Flexibility and Faster Approvals
This is a streamlined way to borrow. With fewer documentation requirements, approvals are often faster, and loan terms can be customized to fit your financial goals.
So, is asset-based lending better for luxury homebuyers? In many cases, yes. Whether you’re eyeing a waterfront estate, a mountain retreat, or a luxury condo in the city, your financial tools should work for your lifestyle, not against it. Asset-based lending puts you in control, giving you the freedom to invest in the property you want without jumping through the hoops of traditional mortgage underwriting.
Ready to learn more? We’re here to answer any of your questions, so apply today or contact us any time.