RetiredHappy
Thinks s/he gets paid by the post
- Joined
- Jun 27, 2021
- Messages
- 2,712
When I bought our current home, with mortgage interest at 2.75%, our FA suggested that we get a small loan for the difference between our new home and previous home that we were selling. This is a separate home transaction from a prior sale/purchase which occured a few years before which I had noted above.I thought it to be a weird FA suggestion.
With more clarity what he suggested was a mortgage or a jumbo loan with a low rate and a monthly lower than I pay now for housing. He suggested I use securities as loan collateral. Not use them for a line of credit to buy a house.
The mortgage company, BOA, only looked at cash flow, i.e. income, dividends/interest, SS, annuities, and RMD withdrawals from IRA. Assets/securities are not used as loan collateral. The accounts were with the same company, i.e. Merrill Lynch.
What your FA said just would not work. It's all about income - cash flow and withdrawals.