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What is the difference between asset depletion and bank statement loans?

Short answerAsset depletion, also called asset qualification, converts your liquid assets into imputed income and suits retirees or high-net-worth borrowers with large savings but little documented income. Bank statement loans use business or personal deposits to document ongoing cash flow, which suits active self-employed earners. Both are non-QM options when tax returns do not tell the full story.
Reviewed by Juan Fernando Romero, NMLS 2557318Updated

The details

Asset depletion typically divides eligible assets by a set number of months to create qualifying monthly income.

Retirement account balances usually count at a discounted percentage to reflect taxes and penalties on withdrawal.

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