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Old 01-23-2015, 10:08 AM
 
41 posts, read 89,279 times
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We are retired and will be selling our home to relocate to a warmer climate. Unheard of right?

Silly me, I assumed qualifying for a mortgage would not be a problem. I was wrong.
According to a mortgage officer at a major bank we recently spoke with, a stellar FICO score and significant assets are not nearly as important as regular verifiable income. Apparently, a couple of 20 year-old's with jobs would qualify in a nanosecond, but a couple of 60 year old's with a sterling credit record and a paid off house are chopped liver.

We could certainly pay cash for a new place, but that would probably require a less costly home, not to mention the lost opportunity cost of the capital.
I was planning on delaying SS until 70. I really don't want to start taking SS early just to help me raise my monthly income level.

So my question is, how did all you retired sun-seekers get into your new digs?

Thanks,
waldomer
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Old 01-23-2015, 10:14 AM
 
Location: Prescott AZ
6,119 posts, read 9,068,748 times
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Why not a bigger down payment on the house and a smaller mortgage? Doesn't that work? I understand tying up alot of cash in your house isn't what you want to do, but still, it would get you where you want to be, right?

So, the loan officers do not consider your income verifiable? Why not? Just because you are not employed? This is an eye opener for me. Have considered purchasing with another mortgage rather than cash. Now I guess I won't qualify even though my FICO is 838.
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Old 01-23-2015, 10:20 AM
 
71,463 posts, read 71,629,249 times
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are you going to invest that money and get a higher return ? do you know how to invest and have the stomach for it?
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Old 01-23-2015, 10:27 AM
 
Location: Prescott AZ
6,119 posts, read 9,068,748 times
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The mortgage interest tax deduction is a plus for me and if I don't have it, I fear I will have to pay alot more to IRS. So, I need a mortgage forever probably.
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Old 01-23-2015, 10:30 AM
 
Location: Orlando
1,983 posts, read 2,631,742 times
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In the spring of 2013, my husband and I applied for a mortgage with a local bank (Tallahassee FL) to purchase a new home in the Orlando area.

He was 86 at the time, and I was 66. Both of us were retired. We owned our then-house without a mortgage, and we had significant assets and an excellent credit rating. We planned to put $50,000 down on a $200,000 house.

We were approved for the mortgage with no problems.

Maybe you should try again with a bank that is local to your area, rather than the "major bank" you tried already.

Last edited by WellShoneMoon; 01-23-2015 at 10:30 AM.. Reason: Correct an error
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Old 01-23-2015, 10:30 AM
 
71,463 posts, read 71,629,249 times
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phxbarb- huh? you are spending 3 or 4 bucks bucks to get one back ?


you can't write anything off after the mortage that didn't make it before the mortgage. it is only that piece that goes over the standard deduction so i am not sure why you say that unless you were at some pivot point like getting ss taxed ?
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Old 01-23-2015, 10:42 AM
 
Location: The Triad (NC)
28,484 posts, read 62,084,629 times
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Quote:
Originally Posted by waldomer View Post
We are retired and will be selling our home to relocate to a warmer climate.
Does "selling" mean (and especially at retirement age) that you own this house outright?
Or at least substantially so?

Quote:
We could certainly pay cash for a new place, but that would probably require a less costly home
That's a GoodThing. This new home shouldn't be more than 25% of your net worth.
Less is even better.

Quote:
So my question is, how did all you retired sun-seekers get into your new digs?
Cash on the barrelhead for a modest property.
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Old 01-23-2015, 10:48 AM
 
6,212 posts, read 4,715,040 times
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In order to qualify in NY which is a crazy place for loans, I had to start social security so I had an income in addition to dividends. Assets alone were not enough to qualify. I also opted for a 30% down payment. That might not have been necessary but it further reduced the rate.

I borrowed for a number of reasons. Eventually when I start taking 403b distributions, the mortgage deduction might help with taxes. I borrowed mainly because of the very low 30yr rates. I am making substantially more returns on the money I borrowed. If that stops I can decide to pay off the house. That is very unlikely over the long term. Who knows what rates will be 10 or 20 years from now, but my fixed low rate will not change.
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Old 01-23-2015, 10:55 AM
 
Location: NC
6,543 posts, read 7,956,796 times
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I had no trouble getting a mortgage on a second home while retired. Perhaps your real estate agent could get you in touch with a reasonable lender. I just went to the lender I had used for my first home. Actually, the same contact person. Maybe that is what helped. Oh, just remembered, ask your investment firm for a confirmation letter of how much income you take out every month. You can raise the amount for a short time to hit the number needed for the new place. (I guess that is assuming you have enough total assets with the firm to pay for the house if you 'wanted' to.)
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Old 01-23-2015, 11:08 AM
 
Location: Idaho
1,451 posts, read 1,152,796 times
Reputation: 5472
Quote:
Originally Posted by WellShoneMoon View Post
Both of us were retired. We owned our then-house without a mortgage, and we had significant assets and an excellent credit rating. We planned to put $50,000 down on a $200,000 house.

We were approved for the mortgage with no problems.
Did the bank require you to show any sources of regular income like SS, pension, annuities payment?

I plan to retire early in the next year or so. Financially, we are in similar situation like yours. We plan not to start collecting my husband SS until he is 70. I will file for spousal benefit when I turn 66 and delay my own SS until 70. My husband has only a small monthly pension from one of the jobs. The companies where he worked the longest only offered 401K. The bulk of our retirement saving is in 401K and IRA which we don't plan to withdraw until reaching 70 1/2.

Bottom line is that we will not have any significant source of regular income until later. We plan to buy a retirement home before selling our current home to ease the relocation process. We can pay cash for the second home but would prefer to obtain a mortgage first then cash out our stocks/funds later to pay the mortgage under favorable condition (at market peaks, minimum tax consequences etc).

Without knowing for sure whether we can obtain a mortgage after retirement, we are planning to buy the second home while I am still working. This is doable. However, it is somewhat stressful trying look for relocation home long distance while working and fixing up the current home to make it more sellable!
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