1. What Is The Asset Depletion Calculator Fannie Mae Income?

The Asset Depletion Calculator estimates monthly income based on available assets and reserves according to Fannie Mae guidelines. This method is used to qualify borrowers who may not have traditional income sources but have significant assets.

2. How Does The Calculator Work?

The calculator uses the asset depletion formula:

Where:

• \( Assets \) — Total available assets in dollars
• \( Reserves \) — Required reserves in dollars
• \( 360 \) — Standard divisor representing 360 months (30 years)

Explanation: This formula calculates a monthly income stream by distributing the net available assets (after subtracting required reserves) over a 30-year period.

3. Importance Of Income Calculation

Details: Accurate income calculation through asset depletion is crucial for mortgage qualification, particularly for self-employed individuals, retirees, or those with significant assets but irregular income patterns.

4. Using The Calculator

Tips: Enter total assets and required reserves in dollars. Both values must be non-negative numbers. The calculator will compute the qualifying monthly income.

5. Frequently Asked Questions (FAQ)

Q1: What types of assets are considered in this calculation?
A: Typically includes liquid assets such as cash, savings, investments, and retirement accounts that can be readily converted to cash.

Q2: How are reserves determined?
A: Reserves typically include required cash reserves for mortgage payments, property taxes, insurance, and other obligations as specified by lender guidelines.

Q3: Why is the divisor 360 months?
A: The 360-month period represents a standard 30-year mortgage term, providing a conservative estimate of monthly income from assets.

Q4: Are there limitations to asset depletion income?
A: Yes, lenders may have specific requirements about which assets qualify, minimum asset thresholds, and may require documentation of asset liquidity.

Q5: Can this method be combined with other income sources?
A: Typically yes, asset depletion income can often be combined with other verifiable income sources to meet total qualifying income requirements.