What Is an Asset-Based Loan?
An asset-based loan is a type of financing that uses the borrower’s assets as income to qualify. This type of lending is often used by individuals who may have difficulty qualifying for traditional financing for reasons such as poor credit scores or the inability to demonstrate consistent income streams.
The most common type of assets used in asset-based lending is bank accounts, stocks, bonds, ETFs, mutual funds, 401Ks, and IRAs. Asset-based lenders in Tennessee typically lend up to 100% of the value of the liquid assets, but this can vary.
Asset-based loans are structured as 30 year fixed mortgages or adjustable rate mortgages. Asset based loans are also known as asset utilization loans since you are utilizing your assets to show your ability to repay the loan.
How Do Asset-Based Loans in Tennessee Work?
Tennessee asset-based loans typically work by using the borrower’s assets as income. The loan amount is then based on a percentage of the value of the assets.
Typically, if you want to apply for Tennessee asset-based loans, you will be leveraging your assets, which can include checking accounts, savings accounts, certificates of deposit (CDs), money market accounts, mutual funds, stocks, and bonds. The borrowing base (the amount you can borrow) will be fixed at a certain percentage of the value of the assets.
For instance, your asset-based mortgage can use up to 70% of the value of your investment and retirement accounts, and up to 100% of the value of all your cash and short-term savings.
Benefits of Asset-Based Lending in Tennessee
Some benefits of Tennessee asset-based lending include:
- You qualify for a mortgage using only assets. Unlike traditional mortgages, asset-based mortgages do not require income verification, so they are easier to qualify for. You only need to prove that you have the assets to secure the loan. A minimum credit score and a minimum down payment are also required.
- You can access up to $3 million in financing. If you have the assets to secure a loan, you can borrow up to $3 million from an asset-based lender. This is more than you could typically borrow using a traditional mortgage loan.
- It is flexible in the type of assets you put down for your loan. Asset-based lenders in Tennessee will accept a wide range of assets, including checking accounts, savings accounts, certificates of deposit (CDs), money market accounts, mutual funds, stocks, and bonds. Banks and credit unions generally don’t offer this same level of flexibility and generally will require you to pledge the assets as collateral. If you do not want to tie up your assets then an asset-based loan is the way to go.
- You can get approved regardless of your income level. Unlike conventional loans, Tennessee asset-based loans do not require the borrower to have a minimum income.
- You can secure a mortgage for a home that isn’t your primary residence. This means this type of loan can also be used to purchase investment properties or vacation homes.
How to Get an Asset-Based Loan in Tennessee
Griffin Funding is a direct asset-based lender that can help you get the financing you need using your assets as income. To get you started on your loan application, here are the steps you will need to take:
- Reach out to a Griffin Funding mortgage strategist.
- Fill out an online loan application.
- Identify the assets you will use to qualify.
- Provide necessary documentation.
- The lender reviews the application and documentation.
- Once your loan is approved, you can sign the final loan document with a notary present.
Areas We Serve
Griffin Funding provides asset-based loans virtually anywhere in Tennessee. Some of the areas we serve include:
- Belle Meade
- Johnson City
- Signal Mountain
Other Non-QM Loans From Griffin Funding
A Non-Qualified Mortgage loan is a type of mortgage that allows borrowers to bypass the standard income verification requirement by using alternate ways of qualification. Non-Qualified Mortgage programs typically require a higher down payment than qualified loans, and often carry higher interest rates than traditional mortgages. However, Non-QM loans also provide a route for homeownership for those who may not qualify for traditional mortgages.
Griffin Funding is a Tennessee mortgage lender that offers a wide range of Non-QM loans. We offer various Non-QM loans to meet the needs of borrowers who may not qualify for traditional loans, such as small business owners, freelancers, and retirees.
Some of the Non-QM loan products we offer include:
- Tennessee bank statement loans
- DSCR loans in Tennessee
- Jumbo loans
- Interest-only loans
At Griffin Funding, we also offer VA home loans in Tennessee to qualifying active duty service members and veterans.
Work With an Asset-Based Lender in Tennessee
When considering Tennessee asset-based loans, it’s important to work with a lender who is experienced in this type of lending. Our team at Griffin Funding is experienced in Tennessee asset-based lending and can help you determine if this type of loan is right for your needs. Contact us to learn more about the requirements for an asset-based loan in Tennessee or fill out an online application if you’re ready to get started.