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Asset backed mortgage experiences/insight?
Posted on 8/15/20 at 2:21 pm
Posted on 8/15/20 at 2:21 pm
I plan to retire in 2 years and I'm concerned my pension alone wont qualify for the home we'd like to buy, $400-$550k. I hear military retirees often have difficulty securing mortgages at retirement until they can prove consistent income from a new employer (I may not go back to work). I'm thinking I should qualify based on assets but dont know how that impacts rates, available lenders, down payment, which accounts are considered etc... We have no debt, ample reserves for downpayment and pension ~$70k.
5
Posted on 8/15/20 at 2:40 pm to TorchtheFlyingTiger
It's weird how stuff has changed so much, lol pre credit meltdown they were giving million dollar loans to illegal immigrants with two pay stubs 
They looked at some tranches of the MBS where 40% of the borrowers never made the first mortgage payment.
They looked at some tranches of the MBS where 40% of the borrowers never made the first mortgage payment.
Posted on 8/15/20 at 2:46 pm to TorchtheFlyingTiger
HECM Reverse Purchase if you are over 62
Posted on 8/15/20 at 2:53 pm to TorchtheFlyingTiger
A couple years ago my parents who are retired moved to be near my brothers and I. They bought a new home and initially they were planning to get a mortgage but pay it off quickly. They had the money to buy outright but wanted to be flexible etc.
When talking to a couple lenders, they wouldn't qualify for a standard 20% down mortgage based on their social security and ira withdrawls. My parents usually only take the minimum distribution required.
The lenders don't care about assets generally and really look at income. Even though my parents had assets to buy 5 homes that didn't matter. I think one lender said if they had put 50% or more down then they might be more flexible.
In the end, my parents just decided to pay in cash to not deal with the hassle of a mortgage. Closing was very quick with no mortgage involved.
When talking to a couple lenders, they wouldn't qualify for a standard 20% down mortgage based on their social security and ira withdrawls. My parents usually only take the minimum distribution required.
The lenders don't care about assets generally and really look at income. Even though my parents had assets to buy 5 homes that didn't matter. I think one lender said if they had put 50% or more down then they might be more flexible.
In the end, my parents just decided to pay in cash to not deal with the hassle of a mortgage. Closing was very quick with no mortgage involved.
This post was edited on 8/15/20 at 2:55 pm
Posted on 8/15/20 at 2:57 pm to SDVTiger
quote:
HECM Reverse Purchase if you are over 62
That won't work I'll only be 45. Since I'm below retirement age I'm unsure if I can even count retirement accounts for asset based approval since I'm not eligible to withdraw penalty free and dont want to lock in taking 72T distributions as long as I can avoid it.
This post was edited on 8/15/20 at 3:22 pm
Posted on 8/15/20 at 5:55 pm to TorchtheFlyingTiger
Purchase the house you want in the latter months of your employment, qualifying for the mortgage based on your earned income?
Posted on 8/15/20 at 10:59 pm to TorchtheFlyingTiger
Pay cash and then max out a HELOC
It wont be for the amount you want.
But it will give you liquidity at 0 cost.
The other tip is to have zero debt when applying for the heloc (to have the maximum loan available).
I helped my grandfather with this.
Sometimes, the reverse mortgage is a good option. Sometimes they are too expensive. For those times, go heloc.
It wont be for the amount you want.
But it will give you liquidity at 0 cost.
The other tip is to have zero debt when applying for the heloc (to have the maximum loan available).
I helped my grandfather with this.
Sometimes, the reverse mortgage is a good option. Sometimes they are too expensive. For those times, go heloc.
Posted on 8/16/20 at 4:59 am to BestBanker
quote:
Purchase the house you want in the latter months of your employment
This is the typical advice. We're stationed overseas and I'd prefer to avoid a long trip to US to rush a home purchase. I'm reading online about asset backed mortgages but dont know
anyone that's ever actually done it.
Would be a shame to burn weeks of leave going to US and miss out on our last chance to travel around Europe from the convenience of home and with our own car etc... Plus, I'd might like to test run the retirement location for a few months to learn neighborhoods etc before jumping into a mortgage.
Posted on 8/16/20 at 5:51 am to TorchtheFlyingTiger
Search out non qm loans
Posted on 8/16/20 at 6:28 pm to TorchtheFlyingTiger
quote:You and I ascribe different priorities to your situation.
Would be a shame to burn weeks of leave going to US and miss out on our last chance to travel around Europe from the convenience of home and with our own car etc...
If I were in my mid 40s, with potentially 30+ years ahead that I could spend portions of solid years of in Europe, I would make damn sure I got my permanent home base choice right. That would seem to be the biggest priority of your situation for the next decade plus. And I wouldn’t sweat a trip back to the States and burning a little leave to do so. That’s tiny in the grand scheme of things.
You think what you’ll have to do is inconvenient or costly, then try doing it another way and it coming out badly.
Good luck on whatever option you choose.
Posted on 8/16/20 at 8:40 pm to TorchtheFlyingTiger
When I had my stuff with merrill Lymch the asset backed mortgages were touted as the way to buy your college kids a condo and not mess with your long term financial plans.
They way it worked was you pledged a number of securities based at .50 cents on the dollar as the down payment and financed the rest. If stocks crashed they could call it in.
You needed like $250k plus in non retirement accounts, which I didn’t have. It did not work with retirement accounts.
They way it worked was you pledged a number of securities based at .50 cents on the dollar as the down payment and financed the rest. If stocks crashed they could call it in.
You needed like $250k plus in non retirement accounts, which I didn’t have. It did not work with retirement accounts.
Posted on 8/17/20 at 1:49 am to soccerfüt
Agreed priority is getting location and house choice right. That's why I prefer to make the decision at our own pace after retirement rather than rushing it during a brief trip stateside months before. We should have a month or two before our household goods even arrive so we will be in hotels or airb&b anyway. Thus the reason I'm trying to determine if getting a mortgage based on assets is feasible.
Posted on 8/17/20 at 3:43 pm to TorchtheFlyingTiger
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