Carrington Mortgage Services, LLC (CMS) is pleased to announce the new and improved Asset Conversion income option to Carrington Prime Advantage and Carrington Flexible Advantage Plus Programs for purchase, rate/term refinance and cash-out transactions. Asset Conversion will utilize the same qualification requirements as the full documentation matrix and best of all, NO additional LLPA’s! With increased percentages of qualified assets and a reduced amortization period of 60 months, the Asset Conversion option adds another tool to your Non QM tool box.
How to Use Asset Conversion
To be eligible, borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1MM in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify.
Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock and margined accounts are not considered qualified assets and are not eligible.
The following assets are considered Qualified Assets and can be utilized to calculate income:
- 100% of checking, savings, and money market accounts
- 100% of the remaining value of stocks & bonds
- 70% of retirement assets
- 100% Cash Value of Life Insurance
- 3-months seasoning of assets required
The following assets are not permitted:
- Funds in Foreign Banks
- Funds in Business Accounts
Asset Conversion may be used in conjunction with Full Income Documentation, but cannot be used in conjunction with Bank Statement Income Documentation or 1-year Alternative Document income types.
The income calculation is as follows:
Monthly Income = Net Qualified Assets / 60 Months
Please contact CorrespondentRM@carringtonms.com with any questions.