Assets, within the context of loan qualification, refers to any liquid (or semi-liquid)accounts a borrower plans to use for a down payment or reserves. From a lender’s perspective, liquid assets can be separated into two categories- funds you’ll use to close (see LTV), and the “reserves” you’ll have left over. The former is most important across 95% of loan products.

Examples of liquid assets:

• Chkg/svgs accts

• Non-retirement investment accounts

• ROTH IRA contributions

• Eligible Gifts

• CDs

Examples of semi-liquid assets:

• Retirement Accounts (that you’re ineligible to draw from w/o penalty)

  • 401k

  • Pensions

  • Mutual funds

Examples of illiquid assets:

• Real Estate

• Personal Property

• Long-term Liabilities held

Special Notes:

• Physical cash never counts. Though legitimate, it’s un-documentable and untraceable, which means banks can’t verify whether it’s truly yours or not. If you have large amts of cash and are planning to qualify for a loan, be sure to deposit all the cash you need to qualify at least 3 bank stmts before applying for the loan.