Mortgage Debt in Retirement article

[athena53]

Have you asked whether they would consider any Roth conversion income as income? Both my sister who does loans for a bank and my mortgage broker indicate that the "pension income" shown on my tax return as a result of Roth conversions would count but it seems that practice varies.

We haven't done that yet; I retired in mid-2014 so was well over the 15% marginal bracket. I think part of the issue was that we had only a one-year track record post-retirement and weren't taking regular draws. We're closing on June 29 so it's a bit late to start another application process. Eventually I plan to get an HELOC- it's a good safety valve for big-ticket expenses like replacing the HVAC-and will have the luxury of time to shop around then.

Our buyer owns a hotel that gets only 2 stars in TripAdvisor (a local Ramada, apparently with very lax housekeeping standards and the occasional bedbug) and she's putting 5% down. I'm darned grateful she got her mortgage although I think we're better risks!

BTW, apparently the regs are going to get even more stringent after August 1. Both my realtor and the mortgage broker shudder when you mention that date.

 

[daylatedollarshort]

I looked into getting a mortgage after we semi-ERed when we were thinking of downsizing (and buying one house before we sold the other). One CU would look at assets and one would consider monthly "income" from assets (three months of moving money from savings to checking). And we only needed to show 3 years of income on a 30 year mortgage. If I remember right, I think one CU would also consider potential rental income from the second house and one would not, since we were not experienced landlords and they would not consider the possibility of us hiring a management company!

None of the rules make logic sense but if we wanted the loan we would have had to play the game and made the monthly transfers for the one CU to show "income".

 

[Koolau]

I realize we're a bit off topic, here, but I too experienced the crazy logic of the "new" mortgage reality post the housing bust. Up is down and down is sideways. FICO scores are ignored in favor of imputed income. Case in point: When trying for a mortgage loan, we were nearly shut out - until they looked at our tax returns. Converting and or spending from the 401(k) was called "income" because we had to pay taxes on it! Totally nuts, but that's what got us our mortgage loan. I really do think we (as a nation, perhaps as a planet) are in big trouble when we act the way we do. End of rant and YMMV.