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mortgage applications , rental applications
Old 08-31-2017, 12:22 PM   #1
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mortgage applications , rental applications

In the FIREd stage how is the mortgage application or rental application handled? Typically in the working stage you need a proof of income coming from an employer.
Do you provide proof of asset? Have you had any previous experience either rental or mortgage app being rejected?
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Old 08-31-2017, 12:40 PM   #2
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In the FIREd stage how is the mortgage application or rental application handled? Typically in the working stage you need a proof of income coming from an employer.
Do you provide proof of asset? Have you had any previous experience either rental or mortgage app being rejected?
Before I got into being a home owner(at age 50), I wanted to get 2 apts in the same building , one for me and the bride and one for my elderly mother. We were going to buy the apts, they were co-ops. Turns out my mother who in my world is well off would not have been approved by the board. She did not have enough income. I would have had to put my name on her deed.
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Old 08-31-2017, 06:28 PM   #3
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There is a formula to convert retirement account assets to income available to lenders but it may depend on type of mortgage. I looked at it once and I think about 2 pct/yr could be applied as income.
https://www.google.com/amp/amp.kipli...-mortgage.html
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Old 09-13-2017, 02:16 PM   #4
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I submitted for a loan pre-approval today. I could tell this is highly unusual to get a loan when there is plenty of asset to cover for the purchase price. Also I was trying to give as least amount of assets as possible to qualify, maybe I am doing it wrong.

My thinking is to get a loan with only 5% down since I was never a home owner. This way I can keep as much assets invested. Yes there is the additional PMI but the income from investments should well cover that.

Any opinion? I feel I doing this by the seat of my pants
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Old 09-13-2017, 02:28 PM   #5
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I submitted for a loan pre-approval today. I could tell this is highly unusual to get a loan when there is plenty of asset to cover for the purchase price. Also I was trying to give as least amount of assets as possible to qualify, maybe I am doing it wrong.

My thinking is to get a loan with only 5% down since I was never a home owner. This way I can keep as much assets invested. Yes there is the additional PMI but the income from investments should well cover that.

Any opinion? I feel I doing this by the seat of my pants
Thats if the markets dont crash. Do the safe thing, put at least 20 % down, take a 15 year mortgage.
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Old 09-14-2017, 12:35 AM   #6
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Originally Posted by perinova View Post
I submitted for a loan pre-approval today. I could tell this is highly unusual to get a loan when there is plenty of asset to cover for the purchase price. Also I was trying to give as least amount of assets as possible to qualify, maybe I am doing it wrong.

My thinking is to get a loan with only 5% down since I was never a home owner. This way I can keep as much assets invested. Yes there is the additional PMI but the income from investments should well cover that.

Any opinion? I feel I doing this by the seat of my pants


I would not pay PMI. Your investment earnings may or may not cover this. I'd put 20% down but I'd do a 30 year mortgage. You can always pay it down sooner if you want, but 30 years gives you more flexibility. Last time I did a mortgage transaction, 15 year rates weren't that much less than 30 year. YMMV
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Old 09-14-2017, 05:12 AM   #7
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I would not pay PMI. Your investment earnings may or may not cover this. I'd put 20% down but I'd do a 30 year mortgage. You can always pay it down sooner if you want, but 30 years gives you more flexibility. Last time I did a mortgage transaction, 15 year rates weren't that much less than 30 year. YMMV
+1.
Payment is not only cheaper w/o PMI, but it is easier to qualify without the PMI hoops to jump through.

I agree with the 30 year vs 15 year mortgage.
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Old 09-14-2017, 05:14 AM   #8
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OP, if your lender has a problem with "big assets, no/low cash flow", change lenders. There are plenty out there who would love to have your application in front of them.
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Old Yesterday, 06:38 PM   #9
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Thanks for all the replies.

I am gearing toward a 30y mortgage since I can always do prepayment if I can down the road and shortent he life of the mortgage.

Still thinking about the 5% vs 20% down-payment. I had always wanted to do 20% in the past but since I am low on cash I am hesitating selling assets.
A quick calculation on a 400k home: The 5% vs 20% difference is about 60k and the PMI is 2k/year.
The PMI will stay constant and later disappear but the 60K will provide a 2k every year at a WR of 3.3%, increasing in time.
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