Are you showing enough assets? Cash, stocks & real estate count

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Showing Enough Assets


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Mortgage lenders don't just look at how much you make; they also want to see how much you have.

While your annual salary plays a significant role in the size and interest rate of your mortgage, the value of your assets - i.e. what you own - is considered as well. The assets that matter most to mortgage lenders include:
• Cash
• Liquid securities (e.g. stock and mutual funds)
• Real estate

The first major threshold that can lead to a better interest rate is $20,000. If you can show more than $20,000 in assets, lenders will reward you with a better rate. Essentially, your asset holdings mean that lending to you is less risky, and they pass that advantage along to you.

Mortgage lenders will consider your retirement savings accounts toward your total assets, including 401(k)s and 403(b)s, IRAs and SEPs. But, they only count 70% of the funds in these accounts, because they are less liquid than securities and savings outside retirement accounts.

Your total assets can include money you plan to use for your down payment and closing costs, so you already may be on your way to a better interest rate!