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Old 09-20-2016, 08:56 AM   #41
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I bet a lender would explain it like this: People with sizable assets but low income are a tiny fraction of the general population. And since most of those people can afford to pay cash for a home, the ones who are interested in a mortgage are only a fraction of that tiny fraction. They are indeed the best credit risks, but because of the small numbers, the cost of accommodating them (the additional software, rules, and employee training required to handle these rare special cases) far exceeds the benefit.
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Old 09-20-2016, 09:10 AM   #42
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Originally Posted by Helena View Post
I just wanted to point out the absurdity of a mortgage company preferring job income [which could suddenly stop] to real assets.

But things [even things that seem negative at the time] happen for a reason.

I no longer need a mortgage because I am no longer interested in a new home. I have decided to stay put. Ironically, the best decision I could have made was made for me.

.
it is absurd and I had this same argument with my bank. I told them I was retiring and they kept telling me to wait until I had the mortgage even though I had 800K in a taxable account that I was using to live off of.

Their argument was I could spend that money and my argument was I could quit my job at any time. Got the mortgage and then told them I had retired.

Go figure
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Old 09-20-2016, 09:51 AM   #43
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I bet a lender would explain it like this: People with sizable assets but low income are a tiny fraction of the general population. And since most of those people can afford to pay cash for a home, the ones who are interested in a mortgage are only a fraction of that tiny fraction. They are indeed the best credit risks, but because of the small numbers, the cost of accommodating them (the additional software, rules, and employee training required to handle these rare special cases) far exceeds the benefit.
I think this is it, exactly. It's hard enough to train the monkeys to do the main part of the job.
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Old 09-20-2016, 11:00 AM   #44
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I have done several mortgages and HELs with PenFed given their very favorable rates at time (prior to leaving MegaCorp).

Has anyone tried to get a HELOC/HEL or Mortgage with PenFed AFTER FIRE'ing?
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Old 09-20-2016, 11:57 AM   #45
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In commercial real estate, banks will make the loan if you open an offsetting account, like sticking 50k in a CD with them that they keep as insurance. Might want to try that.


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Old 09-20-2016, 01:01 PM   #46
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... they wanted to see 3 years of 1040s.

The irony is... because I have intentionally kept my income low....
I didn't have to file an income tax return the past couple of years.

Lesson learned. I will keep more of my nest egg liquid.

.
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Old 09-20-2016, 01:09 PM   #47
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It's hard enough to train the monkeys to do the main part of the job.

What aggravates me the most... is being told by someone who was not born when I bought and paid off my first house... who is only punching income numbers into a mortgage computer program...
who probably has debt, no savings and a lower credit score... that I am too much of a risk to qualify.

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Old 09-20-2016, 01:52 PM   #48
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These situations can also be helped by using a mortgage broker that has many lenders to choose from but the fees and rates could be higher. The big bank lenders seem to be stuck on cookie cutter loans.


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Old 09-20-2016, 02:09 PM   #49
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I'd look at other banks. Wells Fargo has some weird criteria. I had a friend that worked there during the housing bubble, and they wouldn't loan him anything rational for a home loan. He had no trouble getting a loan from anyone else.
I had the same exact issue with WF. Went with a smaller name in town and they immediately within 1month transferred my loan to WF.
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Old 09-20-2016, 02:11 PM   #50
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These situations can also be helped by using a mortgage broker that has many lenders to choose from but the fees and rates could be higher. The big bank lenders seem to be stuck on cookie cutter loans.


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For every bad loan a bank makes, they need to make 10 good ones. Something tells me after the burns of 2006 only the smaller newer banks are willing to take higher risks.


I know a few who had retired only to have to go back to work. Perhaps their retirement income wasn't enough. Or perhaps the modeling assumes the worst case historical market losses +margin which would mean even if you had 1mil, the model is valuing your portfolio at >500k for that historical "worst case" model
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 09-20-2016, 02:27 PM   #51
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What aggravates me the most... is being told by someone who was not born when I bought and paid off my first house... who is only punching income numbers into a mortgage computer program...
who probably has debt, no savings and a lower credit score... that I am too much of a risk to qualify.

.

Yes, you can be upset, but it is not that person who is making the decision.... it is the formula...

To me, that is like yelling at the waiter that your favorite dish is not available as they have sold out... it is not like they ate them all...
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Old 09-20-2016, 02:56 PM   #52
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The irony is... because I have intentionally kept my income low....
I didn't have to file an income tax return the past couple of years.

Lesson learned. I will keep more of my nest egg liquid.

.
Can you file them now?

-gauss
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Old 09-20-2016, 02:56 PM   #53
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What aggravates me the most... is being told by someone who was not born when I bought and paid off my first house... who is only punching income numbers into a mortgage computer program...
who probably has debt, no savings and a lower credit score... that I am too much of a risk to qualify.
I know but, as Texas Proud noted, it's really in the "hands" of computers. I told our mortgage broker, who also sings in our church choir, that I knew if he were George Bailey in "It's a Wonderful Life", we'd have been able to borrow what we wanted. He just laughed a lovely baritone laugh. A human can shake your hand and look you in the eye and size you up, but now it's all algorithms. It does cut out some pretty nasty discrimination that used to occur, but it misses a lot, too.
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Old 09-20-2016, 03:19 PM   #54
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Can you file them now?

As I said previously... NOT getting that mortgage was the best thing to happen to me.

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Old 09-20-2016, 03:31 PM   #55
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I know a few who had retired only to have to go back to work.

I know someone who retired years after I did and has already run out of money. He sold some real estate assets and has now run through that money too.

I have saved money every year I have been retired.

One rule of thumb... if your lifestyle exceeds your income... whether you are employed making six figures... or retired on a modest budget... you are headed for a fall.

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Old 09-20-2016, 03:57 PM   #56
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Has anyone tried to get a HELOC/HEL or Mortgage with PenFed AFTER FIRE'ing?
Yes, I got a mortgage with PenFed in the Spring of last year. No problem.
I've been with them for nearly 30 years, so that may have helped. They asked to see my Fidelity brokerage statement and that clinched it.
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Old 09-20-2016, 04:53 PM   #57
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I bet a lender would explain it like this: People with sizable assets but low income are a tiny fraction of the general population. And since most of those people can afford to pay cash for a home, the ones who are interested in a mortgage are only a fraction of that tiny fraction. They are indeed the best credit risks, but because of the small numbers, the cost of accommodating them (the additional software, rules, and employee training required to handle these rare special cases) far exceeds the benefit.

I agree with you and Harley. The loan officers and mortgage processors and underwriters I'm currently dealing with can't seem to understand the simple brokerage and retirement funds I have. They keep asking for "letters of explanation" from me or my broker or my mother or my dog (neither of which I have anymore sniff) about what these accounts are. It's like they have never encountered people like us. But even more aggravating to me is their lack of basic financial knowledge about retirement accounts.


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Old 09-20-2016, 05:43 PM   #58
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They keep asking for "letters of explanation" from me or my broker or my mother or my dog (neither of which I have anymore sniff) about what these accounts are.
That's what the text next to check box #43 says to ask.
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Old 09-20-2016, 07:19 PM   #59
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From the AARP article referenced previously by pb4uski.

Quote:
ask whether the lender is familiar with and uses the Fannie Mae or Freddie Mac retirement fund annuitization procedures. If they don't, walk out the door and find a lender that does.
I looked up the details on these and they appear to only apply to Bona Fide retirement accounts (ie 401ks, IRAs etc.) and not general after-tax accounts.

-gauss
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Old 09-20-2016, 09:35 PM   #60
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Op here. Yes, this is for a second home which complicates things even more. I am currently working two avenues. A mortgage with Pen Fed and a heloc with BoA. I have calculated that the penalty for breaking my CDs wouldn't be much worse than the lenders closing costs so that wouldn't be too bad. My contract doesn't have a mortgage contingency so my deposit is at risk if we can't close. A little worried about how quickly I can access my CDs if the loan falls apart last minute. I don't think I could have planned this any more poorly. Nice place though!
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