No soup for you!

[Texas Proud]

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...

 

[gauss]

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

 

[athena53]

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.

 

[Helena]

Can you file them now?

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

.

 

[Helena]

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.

.

 

[braumeister]

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.

 

[gardenfun]

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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[FIREmenow]

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.

 

[gauss]

From the AARP article referenced previously by pb4uski.

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

 

[Gatordoc50]

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!

 

[rayvt]

Everybody uses the FNMA guidelines even if they intend to hold the mortgage, because if the loan doesn't conform to FNMA then they *can't* ever sell it in the future.

It is futile and senseless to rail against the guidelines -- they are what they are -- just like it's senseless to complain to a waiter that the dish you want isn't on the menu.

Learn what the guide book says and conform to that and you won't have any trouble. We refi'd 3 times after retiring. The 1st time was going nowhere until somebody at the lender talked to the right underwriter and found out what the appropriate rule was. The next 2 times, I knew the magic words to say, and the loan sailed through.

1) You have to have a *documented* periodic monthly distribution from a retirement account (401k, IRA, etc.). For some stupid reason, it has to be a RETIREMENT account; a regular taxable brokerage account won't do. Yeah, stupid reason -- but it's their reason and you have to accept that. They want something that looks like a paycheck -- regular amount, regular schedule.
They treat that as if it was a paycheck -- and they understand monthly paychecks. Sometimes, they want to see that this withdrawal shows up in your checking account. For me, they did once, the other times the broker's confirmation of instruction was all they needed.

So you show them the letter of instruction that you gave to the broker or administrator of the 401K/IRA. In my case, the broker sent me a letter back confirming those instructions and that's what I showed the lender.

2) The account balance must be large enough to sustain 36 monthly payments.

After you get the mortgage, you do *not* have to continue the monthly distribution; you can cancel it immediately. For one mortgage, I still had the first monthly check uncashed, so after the closing I called the broker and told them to reverse the withdrawal, which they did.

 

[daylatedollarshort]

Everybody uses the FNMA guidelines even if they intend to hold the mortgage, because if the loan doesn't conform to FNMA then they *can't* ever sell it in the future.

It is futile and senseless to rail against the guidelines -- they are what they are -- just like it's senseless to complain to a waiter that the dish you want isn't on the menu.

Learn what the guide book says and conform to that and you won't have any trouble. We refi'd 3 times after retiring. The 1st time was going nowhere until somebody at the lender talked to the right underwriter and found out what the appropriate rule was. The next 2 times, I knew the magic words to say, and the loan sailed through.

1) You have to have a *documented* periodic monthly distribution from a retirement account (401k, IRA, etc.). For some stupid reason, it has to be a RETIREMENT account; a regular taxable brokerage account won't do. Yeah, stupid reason -- but it's their reason and you have to accept that. They want something that looks like a paycheck -- regular amount, regular schedule.
They treat that as if it was a paycheck -- and they understand monthly paychecks. Sometimes, they want to see that this withdrawal shows up in your checking account. For me, they did once, the other times the broker's confirmation of instruction was all they needed.

So you show them the letter of instruction that you gave to the broker or administrator of the 401K/IRA. In my case, the broker sent me a letter back confirming those instructions and that's what I showed the lender.

2) The account balance must be large enough to sustain 36 monthly payments.

After you get the mortgage, you do *not* have to continue the monthly distribution; you can cancel it immediately. For one mortgage, I still had the first monthly check uncashed, so after the closing I called the broker and told them to reverse the withdrawal, which they did.

This matches what we were told at our credit unions and the kinds of documentation we were asked to provide for our refinancing and pre-approval for a rental property.

 

[Gatordoc50]

I asked the Wells Fargo rep if it would help if I set up payments from my retirement accounts under 72t and all I heard was crickets. I'll look into the math for this today . I'll pay tax on the distributions and I'll need to continue those payments for 5 years or until 59.5. Is that correct?I'm 55 now.

 

[Willers]

We recently looked into a mortgage and were given similar instructions on the transfers. Schedule an automatic transfer from our Ally account to checking, continue it for three months, show proof of the auto transfer and the three completed transfers and we would qualify. Yea, it is just moving money from one hand to the other, but they call it "income". Our mortgage broker thought it was silly too but said "I don't get to make the rules..."

We just wrote a check at closing. 22% of our net worth is now in the house. I'm just calling it diversifying our assets with a REIT (a one property REIT that is).


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[ExFlyBoy5]

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.

.

This...

It's mostly automated underwriting and those programs don't have boxes for asset computation. So...find a lender who will do manual underwriting. Your odds will be much better.