My wife and I are "early retired" - me soon to be 55 and she is 52. We have no debt, including no mortgage on our home worth perhaps 250k. We have about 1.45m with about 2/3's in IRA funds, and the rest in mutual funds and about 125k in cash. No income other than interest on the cash and some dividends on the non IRA funds.
We are looking to purchase and move into a different home of similar (hopefully less!) value. Taking our time to find the right place - we could find it in a few days or a year from now. We have no plans/need for a long term mortgage, but it sure would be nice to make an offer on the new home without having a contingency on the sale of our current home(which is in nice shape and ready to sell). We hope to pay off the home equity loan during the closing of the sale of our current home.
The product that seems to fit our needs is a home equity line of credit. That could sit in our back pocket ready to use when we need it. However, our banks are (mostly) saying they can not do such a loan (at least to purchase a second home) without a significant income. It makes no sense for us to pull money out of the market to show income (or to secure a loan) - the cash we have is all we need for the next 2-3 years. (and that income would also kill our healthcare plan).
The first loan officer we spoke with mentioned this could be done as long as we didn't mention purchasing a home when setting up the home equity line of credit. It was an odd "nudge-nudge wink-wink" sort of conversation. We talked with 2 other loan officers (including one at a different branch of the first bank) and they both said no income - no loan.
It all seems a bit odd to me - I always assumed a home equity type of loan used the home itself as collateral and the bank would loan whatever portion of the current home value they felt was a safe risk?
Any thoughts or ideas?
thanks,
Jim
We are looking to purchase and move into a different home of similar (hopefully less!) value. Taking our time to find the right place - we could find it in a few days or a year from now. We have no plans/need for a long term mortgage, but it sure would be nice to make an offer on the new home without having a contingency on the sale of our current home(which is in nice shape and ready to sell). We hope to pay off the home equity loan during the closing of the sale of our current home.
The product that seems to fit our needs is a home equity line of credit. That could sit in our back pocket ready to use when we need it. However, our banks are (mostly) saying they can not do such a loan (at least to purchase a second home) without a significant income. It makes no sense for us to pull money out of the market to show income (or to secure a loan) - the cash we have is all we need for the next 2-3 years. (and that income would also kill our healthcare plan).
The first loan officer we spoke with mentioned this could be done as long as we didn't mention purchasing a home when setting up the home equity line of credit. It was an odd "nudge-nudge wink-wink" sort of conversation. We talked with 2 other loan officers (including one at a different branch of the first bank) and they both said no income - no loan.
It all seems a bit odd to me - I always assumed a home equity type of loan used the home itself as collateral and the bank would loan whatever portion of the current home value they felt was a safe risk?
Any thoughts or ideas?
thanks,
Jim