I’m getting a mortgage

D

dm

Full time employment: Posting here.
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I was debating between paying cash or getting a mortgage for the new house we are buying. The new house will cost about 200k more than our current house once the updates the wife wants done.

Since it would mean taking some money out of our IRA and paying taxes on it, we decided to get a mortgage. We locked in at 3.125%, that made the decision a little easier. I was surprised that they would give a 30 year loan to someone 63 and out of work for the last 13 years.

I guess the kids can worry about paying off the loan when the time comes.
 
Pretty low rate, especially if you itemize your taxes.
 
OP, I’m in a similar position. What tips do you have for getting a lender to approve a mortgage for the gainfully unemployed ( if I am unable to convince DW to stay put). I’ve had a conversation or two about depreciating asset loans but they look at me like I’m an alien.
 
As far as getting the loan my niece who has done home loans for over 15 years commented just before the crash, if you can fog a mirror I can get you a mortgage.

It feels like it's very close to this point right now. In our metro area the market is nuts, on our favorite snowbird spot, the housing market is nuts.
 
ivinsfan said:
As far as getting the loan my niece who has done home loans for over 15 years commented just before the crash, if you can fog a mirror I can get you a mortgage.

It feels like it's very close to this point right now. In our metro area the market is nuts, on our favorite snowbird spot, the housing market is nuts.
Click to expand...

While a single anecdote - alarming..... This is starting to rhyme.
 
ivinsfan said:
As far as getting the loan my niece who has done home loans for over 15 years commented just before the crash, if you can fog a mirror I can get you a mortgage.

It feels like it's very close to this point right now. In our metro area the market is nuts, on our favorite snowbird spot, the housing market is nuts.
Click to expand...

Further: Qualifying for a mortgage ought to be a hurdle to get over, not a fait accompli......
 
LRDave said:
Further: Qualifying for a mortgage ought to be a hurdle to get over, not a fait accompli......
Click to expand...

The party line is that it is a hurdle but I'm not certain I believe that..:LOL:


In SGU they are aggressively marketing new units in areas zoned for "nightly vacation rental". The developers have banks they "work with".

When I asked how the loan gets approved they said they use a number for nightly rental income plug in the number of nights rented ( in other words how many night would you need to make payments) and process it as an "investment" property.


The problem with this is that is a) after years of renting I know the rental price too high. b) you have to use their property manager who takes 30% off the gross rental price for themselves and c) they are building "special" rentals hand over fist and already have too many.

The builders sell out quickly and build more, I cant figure out how the whole thing doesn't go down in flames. Or who actually keep buying these units.

Going OT I guess but I wonder what will happen here if recent stock market declines continue.
 
jazz4cash said:
OP, I’m in a similar position. What tips do you have for getting a lender to approve a mortgage for the gainfully unemployed ( if I am unable to convince DW to stay put). I’ve had a conversation or two about depreciating asset loans but they look at me like I’m an alien.
Click to expand...


I bought my snowbird condo 7 years after I early retired. I easily got a no fee 2.89% mortgage from Third Federal Savings and Loan (who write mortgage loans all over the country, btw) with no problem.

They asked for copies of past 2 years of my IRAs, 1040s, insurance on main home, pension, etc. They quickly prequalified me for a certain amount which enabled me to make an offer on a condo asap.


https://www.thirdfederal.com/borrowing/mortgage-purchase

omni
 
Thanks Omni. I’m a big fan of Third Federal. I actually have a HELOC with them that I would like to leave in place. Not sure if they’ll do that but I’ll give them a call.
 
My guy has 60 refi apps on his desk and more coming. Still waiting for the latest rates... prob not worth the fees since I just spent 8k buying down to 2.75 but they say I might get a 15 with a 1 in front of it :dance:
 
Several years ago (at age 62) after retiring and moving to another State, we were curious too about qualifying. Turns out if you have guaranteed income (pensions, SS etc...) the banks love you more than if you were still working. That income is viewed as even more valuable than our 2 comma investments. If you don't have guaranteed income, they use a formula for calculating what you can afford. Best of luck to you.....
 
I tried to refinance (my $120k remaining mortgage) a few months ago, to get a lower rate. I don't have SS yet. I do have a defined pension, and cash, and I take out some, not much from my IRA. I was told I wouldn't qualify as I haven't set up recurring amounts to be taken from the IRA. Because I had no need to (as I had cash), I loved the way I was playing the tax game by always minimizing my Income, to reduce taxes. But the formulas for approving the mortgages, need a scheduled , finite payout. I am now going through the process of setting up, for NEXT year and the years thereafter, an Annual Income from IRA. This plus my pension, and in the years to come, my SS, will give me a nice income. BUT, I still might have issues with qualifying for right Now. Even though I have a fairly large IRA and 401K and excellent credit score. Any suggestions? Anecdotes from others? Thanks.
 
It seems like different banks have different requirements. First mortgages on residences seem to be the easiest type of bank loan to qualify for in retirement. I imagine it's because banks can turn that paper back into cash, thanks to the well-funded secondary market for first mortgages and deeds of trust.

At Chase, to qualify for a first mortgage refinance, they had us withdraw a couple of thousand dollars a month from our IRA for three months to establish some IRA income to meet their income metrics. Other than that, it was not a problem. We initially wanted a HELOC, but that was harder to qualify for. We're about to try the HELOC again, some five years later, with a much higher net worth. We'll see how it works out.
 
How hard is it to get a mortgage depends on if you are 59.5+, if you have guaranteed income, if the lender is independent or uses Freddie/Fannie.

I'm not 59.5, no guaranteed income, and Freddie/Fannie rules equated me as the same risk as someone who makes $15/hr. Find a good independent lender who write their own rules.
 
I live in a house that I built. We have been living in it for 15 years. Last year we needed some cash and we were able to get a mortgage on our house without too much trouble.

The hardest part was in getting home insurance.
 
I may have to see about getting that rate adjusted. I still have a month, and I was told that I could. It sure would be nice if I could get something under 3%.
 
Is a 3% rate good though if a 10 year is paying 0.5%?
 
I’m hoping for under 3%, I have no idea where the mortgage company’s bottom may be.
 
15 years coming in at 2.5%. I refi'd 9months ago, doesn't quite make sense unless I get a number starting with a 2. LMK when that pops up plz
 
Just refinancing a 30 year and the rate is 2.85.
 
I guess it all depends on if you have after tax money that is just sitting in bonds.

If I had $200,000 in 10 year treasuries paying me 0.8%, I would not want to take out a mortgage for 3%. Unless you are timing the market or something.
 
I don't disagree with that ^^, but if you put the $200K in your regular AA I would be willing to take the bet that you could beat 3% over 30 y.ears, or even however long you live in the house. Not guaranteed, but I think a good bet
 
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