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Best mortgage lenders for the ER crowd?
02-27-2010, 07:05 AM
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#1
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Full time employment: Posting here.
Join Date: Feb 2006
Posts: 599
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Best mortgage lenders for the ER crowd?
I own a fairly expensive home with a 5% mortgage, but the rate is only fixed for 7 years. The reason I did not fix the loan for 30 years was because at the time (early 2009) I could not find anyone who would do it for me since I had no W2 income. In fact, I could barely find anyone to do the loan at all due to the financial panic. I had a relationship with my current lender when I DID have W2 income, so they did the loan but would only do an ARM.
Anyway, I would like to turn this mortgage into a LT fixed rate loan so I don't have to worry about refinancing it in the future when rates could be higher, or have to pay it off with cash reserves (which I have but don't really want to put into the house). I realize I could just pay the loan off and not worry about it, but that's not what I want to do right now for various reasons.
Are there ER-friendly lenders who understand how to make a loan to ER-type folks who have a high net worth but no W2 income to speak of? DW does work and has W2 income, but she is a public school librarian and does not make enough money to qualify for our existing loan I'm pretty sure. Our credit scores are very good and we have extensive credit history, including paid off homes and businesses.
Thanks!
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02-27-2010, 07:39 AM
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#2
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Recycles dryer sheets
Join Date: Feb 2010
Posts: 389
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See if you can find a local Savings and Loan to help. Assuming you are not moving in retirement, they will be the most community oriented, and oriented toward servicing the loan themselves. You want flexibility and a bank that can pay attention to you. If they resell it you will get none of that.
Just my Opinion.
The mortgage we got for the house we are moving to was one of these. We have/had three properties to sell. We've sold two of them together and the S&L simply readjusted our payments without any rigamarole at all. And now the renter virtually pays both the taxes and the reduced mortgage. But if we'd had a sold mortgage, that could never have happened. Additionally the S&L was delighted to get another 30% of the mortgage back so that it could loan more out. They are also way more willing to do a fixed rate and to adjust it when the rate changes for very little.
Z
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02-27-2010, 07:48 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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I think the issue you may face is that when you take a fixed loan you are essentially dealing with the agency underwriting gudelines unless you are talking about a true jumbo (in which case I wish you luck). I would suggest that you contact a mortgage broker and have a candid discussion with them about your chances of qualifying for a fixed rate loan. If you are a Schwab client, you could also call up their mortgage division and chat, since my experience with them for a HELOC has suggested that they are willing to perhaps color a bit outside the lines if you are a client with a history and substantial assets.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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02-27-2010, 07:57 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I am curious - - Is there a possibility that you might not be able to refinance into a 30-year fixed? If so, what is your "Plan B"?
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
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02-27-2010, 08:19 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,298
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Pointed a friend at the PenFed 30 year 5% fixed loan. Worth checking out.
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02-27-2010, 04:26 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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If you have high net worth, why not pay cash and forego the loan ?
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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02-27-2010, 08:02 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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When 30 year, 5% loans are available, some of us want them. A mortgage is a negative bond, and again to some of us a negative bond looks like a good idea right about now.
Likely anyone here knows that he could just pay cash, but the question before us in this thread is not "why don't you pay cash", it is "how does an ER get a loan?".
For discussion of the morality, wisdom and general good karma of paying off the mortgage vs. carrying a mortgage see numerous older threads, including some in which a member or two fell on their swords.
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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02-27-2010, 09:55 PM
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#8
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Full time employment: Posting here.
Join Date: Mar 2007
Posts: 577
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Try Churchill Mortgage Dave Ramsey claims they use their brains instead of a cookie cutter when deciding who to lend to. I almost suggested what Frayne said but don't want to open that can of worms.
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I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
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02-28-2010, 07:50 AM
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#9
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 81
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Yesterday I was talking with a Realtor friend. She told me that she has a house that she has "sold" FIVE times. Each time the deal fell through because the parties couldn't get mortgages. She said that they have tightened the rules so much that anything unusual in their background kicks them out of the system.
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02-28-2010, 08:05 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by Darryl
Try Churchill Mortgage Dave Ramsey claims they use their brains instead of a cookie cutter when deciding who to lend to. I almost suggested what Frayne said but don't want to open that can of worms.
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Of course, Dave Ramsey would have his head for taking out a loan when he can afford to pay cash.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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02-28-2010, 09:32 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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Quote:
Originally Posted by haha
When 30 year, 5% loans are available, some of us want them. A mortgage is a negative bond, and again to some of us a negative bond looks like a good idea right about now.
Likely anyone here knows that he could just pay cash, but the question before us in this thread is not "why don't you pay cash", it is "how does an ER get a loan?".
For discussion of the morality, wisdom and general good karma of paying off the mortgage vs. carrying a mortgage see numerous older threads, including some in which a member or two fell on their swords.
Ha
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Scuse me, while I kiss the sky !
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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02-28-2010, 10:12 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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I understand your feeling. Perhaps my response seemed a little over the top.
However, it seems very easy for posters to jump right into changing someone's improper thoughts, instead of just trying to answer the question as asked. It hijacks threads, since many more people have an opinion about the proper or improper nature of some financial action than actually have factual knowledge on the requested topic. Soon anyone who is interested in the original topic has given up and avoids the thread, as it becomes mostly just people telling not to do it because it is immoral or in conflict with some radio-wave expert's opinions. IMO it detracts considerably from the utility of the forum.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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02-28-2010, 10:20 AM
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#13
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by cardude
Are there ER-friendly lenders who understand how to make a loan to ER-type folks who have a high net worth but no W2 income to speak of? DW does work and has W2 income, but she is a public school librarian and does not make enough money to qualify for our existing loan I'm pretty sure. Our credit scores are very good and we have extensive credit history, including paid off homes and businesses.
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ER-friendly? I wouldn't hold my breath.
As another poster's suggested, you could try PenFed's mortgage rates. If you're qualified for membership with NFCU you could take a look at them too.
Some of the mortgage lenders are reverting to the standard 28% mortgage debt/36% total debt ratios, and the denominator of that ratio is income. They'll count dividends/interest as income in addition to pension/SS, but would be reluctant to consider cap gains from one-time sales. Maybe you could make the case that a 72(t) withdrawal counts as income. But almost every mortgage these days is conforming to FHA resale guidelines.
Another option might be screening Bankrate.com's interest rates for your local banks. I stumbled across a small regional bank that way last year and we ended up refi'ing both our residence and our rental through them.
If you're not having any luck with your own search you could try a mortgage broker or consider paying points for a lower rate.
I don't think any lenders give a crap about credit history, just its contribution to the present credit score.
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02-28-2010, 11:00 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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Quote:
Originally Posted by haha
I understand your feeling. Perhaps my response seemed a little over the top.
However, it seems very easy for posters to jump right into changing someone's improper thoughts, instead of just trying to answer the question as asked. It hijacks threads, since many more people have an opinion about the proper or improper nature of some financial action than actually have factual knowledge on the requested topic. Soon anyone who is interested in the original topic has given up and avoids the thread, as it becomes mostly just people telling not to do it because it is immoral or in conflict with some radio-wave expert's opinions. IMO it detracts considerably from the utility of the forum.
Ha
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Sorry, been busy looking for my sword to disembowel myself.
Actually I was only offering a suggestion based on the original poster's comment about high net worth, didn't mean or imply that I wanted to hijack the thread at all.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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02-28-2010, 01:01 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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Quote:
Originally Posted by haha
I understand your feeling. Perhaps my response seemed a little over the top.
However, it seems very easy for posters to jump right into changing someone's improper thoughts, instead of just trying to answer the question as asked. ... IMO it detracts considerably from the utility of the forum.
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Well, just my two cents - I understand what you are saying, but IMO it kinda depends on the question and how it was stated.
For example, if someone asks "Where's the best place to buy Brake Fluid in bulk, cheap?", it certainly would be helpful to ask why someone would need so much brake fluid. There are some people who are not aware that cars don't normally go through brake fluid in the same way as they might oil and gas and WW fluid.
In this case, I thought it was pretty clear that the OP was well aware of the loan/no-loan options and was just looking for a source. I guess it wasn't so apparent to others.
-ERD50
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02-28-2010, 01:20 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by ERD50
In this case, I thought it was pretty clear that the OP was well aware of the loan/no-loan options and was just looking for a source. I guess it wasn't so apparent to others.
-ERD50
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Good point. It happens that OP CarDude is a long time successful new car dealer. If he doesn't understand the good and bad of debt, who would?
Also, when I see many posts by people who say they are in the 15% tax bracket, I think help with borrowing strategies might be useful to many of us. I am beginning to consider buying a place, and I will want to borrow and I expect that in the current environment there could be roadblocks to someone who relies on portfolio income.
Also, I think I have noticed a greater tendency for forum answers to be prescriptive, rather than just technical.
There is another current thread where the OP is trying to get help with a technical question about debit cards. But the thread keeps getting cluttered with parenting advice, which IMO is somewhat skew to the question before the floor.
But I guess that if someone asked the best human poisons, we might all want to ask why do you want to know?
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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02-28-2010, 01:38 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Quote:
Originally Posted by brewer12345
I think the issue you may face is that when you take a fixed loan you are essentially dealing with the agency underwriting gudelines unless you are talking about a true jumbo (in which case I wish you luck). I would suggest that you contact a mortgage broker and have a candid discussion with them about your chances of qualifying for a fixed rate loan. If you are a Schwab client, you could also call up their mortgage division and chat, since my experience with them for a HELOC has suggested that they are willing to perhaps color a bit outside the lines if you are a client with a history and substantial assets.
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I've had luck with them in the past and just recently did a refi. However, I do have a pension and SS income in addition to a sizable brokerage account. You can ask if your account manger will put in a good word for you with the banking side of the house. Credit is still tight. Too much money in the carry trade.
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“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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02-28-2010, 02:00 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Location: Chicago
Posts: 13,186
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Quote:
Originally Posted by ERD50
For example, if someone asks "Where's the best place to buy Brake Fluid in bulk, cheap?", it certainly would be helpful to ask why someone would need so much brake fluid.
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I guess opinions do vary because if I wanted suggestions for sources of cheap brake fluid in bulk and you asked me why, I can't imagine how it would be helpful other than to satisfy your idle curiosity or make your political point concerning the ecolgical impact of high levels of brake fluid usage. You might as well ask me what it means to be a bulk quantity brake fluid user in the midst of history.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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02-28-2010, 02:33 PM
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#19
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Full time employment: Posting here.
Join Date: Feb 2006
Posts: 599
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I had forgotten Schwab had a mortgage division and I have a pretty good chunck of money at a brokerage account there, so I'm going to check with them Monday. Thanks for the reminder!
I'm just looking for a conforming loan of around $400K (about 65% of our home's appraisal), and with DW's W2 income and net rental income and portfolio interest income I can document about $6700 per month in total income so maybe that will work.
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02-28-2010, 02:36 PM
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#20
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Full time employment: Posting here.
Join Date: Feb 2006
Posts: 599
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Quote:
I am curious - - Is there a possibility that you might not be able to refinance into a 30-year fixed? If so, what is your "Plan B"?
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I guess it's possible nobody would want to do it, but I'm thinking with enough money down surely I could convince someone to do the loan. If not I guess I will just pay it off in 7 years and forget about it.
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