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Old 05-25-2010, 04:43 PM   #81
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I'm running into the same thing. Their attitude seems to be if you want to qualify with net worth, pay cash. Which would suit me fine, if interest rates were 9% and prices commensurately lower. But that is not the case.

But these people are cogs in a giant wheel. They don't have much freedom, and even if you get through to someone who realizes that there is scant chance of you ever defaulting, they have no freedom either because the bank examiners are breathing down their necks.

Ha
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Old 05-25-2010, 04:47 PM   #82
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Quote:
Originally Posted by DangerMouse View Post
Think it might have been Cardude who was having issues getting a refi because of lack of a job. Seems like if some banks can't check the tick boxes they don't know how to proceed.
This thread?.....


Best mortgage lenders for the ER crowd?
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Old 05-25-2010, 04:50 PM   #83
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Originally Posted by IndependentlyPoor View Post
Just had a very entertaining telephone conversation with a USAA mortgage person. All nice and by the book until I said that we were retired and living mostly from our portfolio. Hmmm. Long hold while guidlines were checked.
Seems like you have to show sufficient dividend/interest income. No concept of total return. Ut-oh. Careful tax planning has minimized taxable income.

Me: How much income is required?
USAA: 41% debt to income ratio
Me: We don't have any debt.
USAA: (long pause) Oh.

The poor dear had no idea how to deal with a situation like ours, and I didn't know enough to ask the right questions. It seemed odd that she never thought to ask the size of our portfolio.

Anybody have recent experience with getting a mortgage while FIREd?

Just askin. This is NOT intended to start another mortgage/no-mortgage battle.
Try another lender? A big part of the issue is that much of the automated underwriting being done by semi-skilled people in order to send the loans to Fannie/Freddie/FHA is "check the box or else" type underwriting. Give Pen Fed a call or perhaps try whoever your broker is (broker presumably has a good idea of your assets). My guess is a portfolio lender may be happy to toss "check the box" out the window. If you do not insist on a fixed mortgage (take an ARM) you are more likely to find a portfolio lender. In my neck of the woods, for example, Hudson City Bank will do portfolio loans if you are a sqeaky clean borrower with significant equity in the property.
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Old 05-25-2010, 07:42 PM   #84
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One thread that I remember was started by Koolau.

I Lost It Today - Warning! Long post (er, rant)

Then, there was another member who wanted to buy another home before selling his existing one. He ended up paying cash, I believe. However, I have problems looking for the post.
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Old 05-25-2010, 08:23 PM   #85
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We've made an offer of all cash last Friday with the thought being to get a mortgage later. or not. Taking Brat's comment of "all cash only means 10-20% lower value" to heart and have made our offer with that and other factors in mind. Bank has responded verbally with a counter reducing their asking by about 1.8%. We've responded with our original offer as buying this place will be buying plenty of work. Way too many houses on the market and we've actually seen some of the warts on this gal - the bank in Cleveland hasn't.
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Old 05-25-2010, 08:42 PM   #86
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We've made an offer of all cash last Friday with the thought being to get a mortgage later. or not. Taking Brat's comment of "all cash only means 10-20% lower value" to heart and have made our offer with that and other factors in mind. Bank has responded verbally with a counter reducing their asking by about 1.8%. We've responded with our original offer as buying this place will be buying plenty of work. Way too many houses on the market and we've actually seen some of the warts on this gal - the bank in Cleveland hasn't.
I think paying cash only reduces the price when financing is not widely available. In Brat's case, I think that the units cannot be financed.

Ha
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Old 05-25-2010, 09:23 PM   #87
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I think paying cash only reduces the price when financing is not widely available. In Brat's case, I think that the units cannot be financed.

Ha
Ditto this odd place - its a sprayed-on-a-form concrete dome with a 20' radius buried in the ground. It had an offer that failed because they couldn't get financing - and now the Obama $6500-$8000 tax credit is gone.

A roof leak can mean digging through 20 feet or more of earth. Not like replacing a shingle or two. Then there's the 460' deep well that didn't produce but a bit of water back when it was drilled in '85 - and can't be hooked to city water. Doubt the water table has come up much.... Not problems I'm familiar with - could be all kinds of entertainment and we need to retain enough $$ to play!
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Old 05-25-2010, 09:26 PM   #88
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Oh man! Wouldn't it be simpler with an RV? And less expensive too.
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Old 05-25-2010, 09:43 PM   #89
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Oh man! Wouldn't it be simpler with an RV? And less expensive too.
You know betttter - RV: all the problems of a house, but with a bouncy foundation and a complete drive system to move it down the road. By definition ALL the parts on an RV are moving parts - most house parts just sit there..
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Old 05-26-2010, 12:21 AM   #90
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Originally Posted by IndependentlyPoor View Post
Just had a very entertaining telephone conversation with a USAA mortgage person. All nice and by the book until I said that we were retired and living mostly from our portfolio. Hmmm. Long hold while guidlines were checked.
Seems like you have to show sufficient dividend/interest income. No concept of total return. Ut-oh. Careful tax planning has minimized taxable income.

Me: How much income is required?
USAA: 41% debt to income ratio
Me: We don't have any debt.
USAA: (long pause) Oh.

The poor dear had no idea how to deal with a situation like ours, and I didn't know enough to ask the right questions. It seemed odd that she never thought to ask the size of our portfolio.

Anybody have recent experience with getting a mortgage while FIREd?

Just askin. This is NOT intended to start another mortgage/no-mortgage battle.
Been retired 14 years, living off of assets...no retirement, etc. Over the years we paid cash for vehicles, RVs, etc. and we traveled so much that we used a mail forwarding service. Banks don't like any of that!

We financed a vehicle through USAA in '07...interesting process. I had enough money at USAA to pay for the vehicle several times over. I finally said, look, you can see that I have enough money here to pay cash, but I want to get a loan so I can establish a recent payment history. I had to pay extra down to get the interest rate I wanted, but they made the loan. I had excellent credit scores (charge cards paid off every month), it was just the lack of a regular income that gave him indigestion. He actually asked me to promise that I would "arrange to have funds to make the payments". Duh! I had the money to pay for it already in the bank. I set up auto pay from one of my accounts at USAA.

Last fall we bought a house...hey, they were on sale and interest rates were low. I had no problems securing a mortgage through USAAthis time. When I first called USAA about a mortgage I asked for an underwriter and I really think that was the key. I did have to fax copies of my "sources". Why don't you call again and ask to speak with an underwriter.

Gee, I feel like this is a Hi, I am...
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Old 05-26-2010, 08:07 AM   #91
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This came to me via EMAIL ... apparently there are loan programs which use your portfolio as an asset. Sorry - in advance - for the font ...

FWIW, I closed on a HUD home Monday - with cash. Tried putting a loan on a free n'clear rental ... was REJECTED. Apparently the underwriter couldn't get past the tax returns I filed. Didn't want to hear that some deductions like depreciation and auto are actually $$ in my pocket. Did say I would have had no problem a few years ago. The email below came a day late ...

Quote:

Did you know that there is a program for your high net borrower to use his retirement, securities, stocks, bonds as collateral and can borrow against at rates as low as 1.23% on current day value.
Makes a lot of sense for the borrower who may have that security tied up in a very nice returning product and does not want to draw on it for one reason or the other. He takes a low interest loan against it, the position still grows and he buys his home with very little out of pocket expense. It is not secured against the property being purchased so it does not effect his lender LTV or CLTV.

Scenario:

Client would like to buy 1,000,000.00 home.

He/she has 500,000.00 in stockmarket today.

This program will lend up to 400,000.00 on that position as far below market interest.

Client has 100k liquid in different bank deposits

Well if the guidelines call for 20% down for this purchase, he is short cash without liquidating.

He does not need to in this case…he takes out the 200k as down payment and still has a line of 200k to do whatever work he needs on house.

He gets the best rate out there on his real estate loan, his investment position keeps on growing(he hopes) and he get's a very low interest loan against his investment without ever touching.


Lance Adie
Mortgage Consultant
Wells Fargo Home Mortgage
M3724-011
100 Cummings Ctr
Beverly, MA 01915
(978) 524-2547 Tel
978-853-6512 Cell
866-829-3971 Fax
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Old 05-26-2010, 07:22 PM   #92
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I've lived in condos for over a decade - my advise would be to, ALWAYS, buy a condo that is similar or equivalent to the price of a SFH in the area. That way, people are there because they want to be, not because they cannot afford anything else. When people can't afford anything else, they tend to be loud, disrespectful and the property tends to be poorly constructed. There are several ways to mitigate sound from next door and above and below - best one I've seen is Quiet Rock from QuietSolutions.com.

Condos have their place - obviously, if you want to lock and go, have things that SFHs cannot afford (pool, beach, tennis courts).

I'm in a beachfront condo (with quiet rock on my common walls) that I love!
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Old 05-26-2010, 07:54 PM   #93
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Just curious,

What happens if you buy a condo and 50% of the units are empty due to foreclosures, would you have to pay twice as much HOA fee to cover the empty units?
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Old 05-26-2010, 07:55 PM   #94
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And do you have take turns patrolling the vacant units to keep them from getting broken into?
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Old 05-26-2010, 08:09 PM   #95
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Just curious,

What happens if you buy a condo and 50% of the units are empty due to foreclosures, would you have to pay twice as much HOA fee to cover the empty units?
Probably best not to buy there - I knew a RE agent who told me, "I would never buy a new condo" - it took some time to realize what she meant.
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Old 05-26-2010, 08:24 PM   #96
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I'm in a beachfront condo (with quiet rock on my common walls) that I love!
Was this how the place was built, or is this a retro-fit by you?

Ha
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Old 05-26-2010, 08:26 PM   #97
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Originally Posted by tmm99
Just curious,

What happens if you buy a condo and 50% of the units are empty due to foreclosures, would you have to pay twice as much HOA fee to cover the empty units?
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Probably best not to buy there - I knew a RE agent who told me, "I would never buy a new condo" - it took some time to realize what she meant.
I have no plans to buy any condos, but I was just wondering what happens to those folks who have bought a condo in the complex where half of the units were in foreclosures now...
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Old 05-26-2010, 08:35 PM   #98
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We bought in 2006 and put quiet rock over the existing sheetrock in common walls - QuietRock Soundproofing and Noise Reduction Drywall - Higher Performance, Higher Reliability, Lower Cost

At that time, they did not have flooring solutions - they do now. My unit is completely quiet (when we moved in, we had college kids next door smoking and partying until all hours)- Quietrock claims that the one layer of the quiet rock (which is the equivalent as 8 layers of regular drywall and can be applied just like regular drywall) should make things soundproof - and I would agree. I don't ever hear a thing from either of my 2 neighbors.
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Old 05-26-2010, 08:40 PM   #99
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Was this how the place was built, or is this a retro-fit by you?

Ha
The place was built in 1988 and then the builder went out of business (the condo market tanked in the late '80s). Unfortunately, the buildings went to auction in the early '90s and suffered through a severe price reduction and took about 20 years to recover.

Prices for beachfront condos in New Haven County are now about 20% above where they were in the late '80s and recovering somewhat - coincidentally, in Fairfield County, CT, prices for condos are down about 47% since 2006.
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Old 05-27-2010, 09:31 AM   #100
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...
Yep, a wall-mount, iPod dock for a whole-condo entertainment system.

Reviews: Sonance iPort In-Wall Docking System | iLounge
There are also apps for zone control throughout the house. The settings include light, heat, blinds and sound. There is a complex here equipped like that. Obviously intended for empty-nesters or multiple iPod familes.
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