Okay, this is probably a simple question, but it's my first time around the block.
My MIL is retired and considering a move. She'd be selling her (paid for) house (approx $150K) and buying another with a slightly lower value. What's the smartest way for her to do the financing (that is, buy the new house while waiting to sell her present house). Her only "income" is a SS check of about $1500 per month, so I'm guessing a conventional mortgage is a nonstarter.
Options that occur to me:
1) She could simply buy the new house using her non-IRA investments, replenish these investments once she's sold her old house. Problems: The tax hit of selling appreciated assets in these accounts (this is not a major issue) and she'd nearly clean out her non-IRA funds leaving little on hand for moving expenses, etc.
2) Some kind of temporary financing secured by her IRA accounts (which are bigger than her non-IRA investments). I have no idea if these kinds of loans are common, expensive, etc.
3) Get a conventional loan on the new house with me or one of her kids (somebody with income and good credit) as a co-applicant. It would be paid off as soon as her old house sells, so it's not much of a hassle. She could put down a large down payment, so (in a rational world) the whole thing would seem to be very low risk to the bank/mortgage company.
Any thoughts on ideas I overlooked or the costs of various approaches would be appreciated.
My MIL is retired and considering a move. She'd be selling her (paid for) house (approx $150K) and buying another with a slightly lower value. What's the smartest way for her to do the financing (that is, buy the new house while waiting to sell her present house). Her only "income" is a SS check of about $1500 per month, so I'm guessing a conventional mortgage is a nonstarter.
Options that occur to me:
1) She could simply buy the new house using her non-IRA investments, replenish these investments once she's sold her old house. Problems: The tax hit of selling appreciated assets in these accounts (this is not a major issue) and she'd nearly clean out her non-IRA funds leaving little on hand for moving expenses, etc.
2) Some kind of temporary financing secured by her IRA accounts (which are bigger than her non-IRA investments). I have no idea if these kinds of loans are common, expensive, etc.
3) Get a conventional loan on the new house with me or one of her kids (somebody with income and good credit) as a co-applicant. It would be paid off as soon as her old house sells, so it's not much of a hassle. She could put down a large down payment, so (in a rational world) the whole thing would seem to be very low risk to the bank/mortgage company.
Any thoughts on ideas I overlooked or the costs of various approaches would be appreciated.