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Income (sorta) poor, but asset (kinda) well off
Old 04-06-2013, 06:52 PM   #1
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Income (sorta) poor, but asset (kinda) well off

I suspect we're not the only ones here with this profile: modest public sector pensions, not yet collecting SS (ages 65 & 56), no debt, portfolios large enough to allow both of us to be retired with a potential spending level more than we're used to (still being coupon clippers, but don't flinch at the occasional splurge).

So what does this mean to potential lenders? We have no need to incur debt, but if we wanted to say, buy an investment property, could we qualify on our assets (and credit history), or would our paltry "income" cause lenders to turn up their noses?
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Old 04-06-2013, 07:05 PM   #2
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You've got public sector pensions, so that is a great thing. If you need more income, make sure to have an income 'stream' from your retirement savings rather than taking it in a lump sum. That is what we've learned along the way.
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Old 04-06-2013, 07:23 PM   #3
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All you have to do is set up a monthly deposit into a checking account from your asset account(s) and that is considered as income. You'll have to show that you have enough to last for 3 years worth of deposits.

I recently spoke to a bank regarding this exact issue as I will be needing a mortgage after I retire from my job and have no job income.
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Old 04-06-2013, 07:26 PM   #4
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All you have to do is set up a monthly deposit into a checking account from your asset account(s) and that is considered as income. You'll have to show that you have enough to last for 3 years worth of deposits.

I recently spoke to a bank regarding this exact issue as I will be needing a mortgage after I retire from my job and have no job income.
The situation may differ from lender to lender, but in addition to the 3 years it needs to last, I have found they also like to see that monthly deposit having been established for a year.

I had one at 10 months (having had it earlier from another account) and they got their knickers in a knot over that. I had to write a letter of explanation about why the income stream moved from coming from one asset account and then from another one.
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Old 04-06-2013, 09:35 PM   #5
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Originally Posted by Accidental Retiree View Post
You've got public sector pensions, so that is a great thing. If you need more income, make sure to have an income 'stream' from your retirement savings rather than taking it in a lump sum. That is what we've learned along the way.
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Old 04-06-2013, 10:08 PM   #6
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You've got public sector pensions, so that is a great thing.
Actually, that would depend on the "public sector." Perhaps you're a retired teacher in Illinois. The legislature is working overtime trying to reduce the pension you've been receiving to compensate for not funding the pension fund for decades. Not a real credit worthy situation if that pension is the applicants primary source of income.
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Old 04-07-2013, 11:22 AM   #7
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Actually, that would depend on the "public sector." Perhaps you're a retired teacher in Illinois. The legislature is working overtime trying to reduce the pension you've been receiving to compensate for not funding the pension fund for decades. Not a real credit worthy situation if that pension is the applicants primary source of income.
Always a potential problem, especially when pension funds look like tasty low-hanging fruit to lawmakers.
The situation in our state is better than many others - for now.
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Old 04-07-2013, 11:41 AM   #8
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I suspect we're not the only ones here with this profile: modest public sector pensions, not yet collecting SS (ages 65 & 56), no debt, portfolios large enough to allow both of us to be retired with a potential spending level more than we're used to (still being coupon clippers, but don't flinch at the occasional splurge).

So what does this mean to potential lenders? We have no need to incur debt, but if we wanted to say, buy an investment property, could we qualify on our assets (and credit history), or would our paltry "income" cause lenders to turn up their noses?

i think they do it based on your income-paltry or not
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Old 04-07-2013, 11:56 AM   #9
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Always a potential problem, especially when pension funds look like tasty low-hanging fruit to lawmakers.
The situation in our state is better than many others - for now.
I wonder whether this is less dependent on the state from which you draw a public pension and more on what kind of funding requirements your lender may have.

If we only have to show guaranteed income for the next 3 years, maybe that gives them confidence in the pension lasting at least that long.

And couldn't they just as well worry about a private pension, too?

And then there is always that asteriod.

I have found variety in mortgage brokers and their guidelines, along the way, so if I wanted to invest and didn't get the terms I wanted, I would move on and just find me another one, cos they're makin' them thangs ever' day.
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