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One of my lenders has a new program and I've used it a couple of times already. Just came out in late April and it's basically "Assets for Income" but it is calculated based on your assets, credit score and it can be used with other income as well.
(1) Must have a 700 score
(2) Must have a 1 to 2 year history of managing the funds (Example: we will ask for your 12/31/2015 statement to show that you had the funds). Funds can be inherited but you have to have had them for 1-2 years.
(3) Calculation is based on the term of the loan - for example, if you are getting a 15 year mortgage, we use 180 months.
(4) We deduct annuity income but that could be used in other income.
(5) The assets must be at least 1 1/2 times the loan amount OR at least $500,000.00.
(6) All types of property but must be a primary or a secondary residence.
If you need more info, PM me and I'll send you a flyer. It's a nationwide program, rates are the same as the top program; it's a program through Fannie Mae but very few are offering it right now.
I am amazed at the lending institutions. They don't want to give a mortgage to people who are retired, but have assets and a lifelong history of prudent finances. These same lenders seem to have little trouble with subprime mortgages, mortgages with virtually no down payment and ARMs that are very risky.
This is NOT a subprime program; this is a brand new program for Fannie Mae designed for those with limited income but that have assets.
I asked the senior underwriter if the files I had submitted were indicative of what they (as a lender) were seeing - he said yes.
This is a general profile of the files I did (3 since April)
(1) Scores were over 740
(2) All were 62 or older
(3) All had assets well over 500K
(4) Two of them were still working in other states but planning to retire within the next few months. We could not use that income and we could not (in 2 of the cases) use it as a second home. These were purchase sales where the property had to be primary occupied.
It did remind of a program Chase had years ago but this program is a conforming loan sold right to Fannie Mae. One borrower got a rate of 3.00% 15 year fixed; the others took 30 year loans at 3.625% and 3.750%.
I am amazed at the lending institutions. They don't want to give a mortgage to people who are retired, but have assets and a lifelong history of prudent finances. These same lenders seem to have little trouble with subprime mortgages, mortgages with virtually no down payment and ARMs that are very risky.
Did you read my post? Oh, BTW, you need 20% down but most do 25% down. (Rates improve at that level).
This "Income for Assets" is designed for those in your post and very welcomed. Underwriters really scrutinze it though but all of mine have closed.
Common sense on this.
I felt comfortable signing my name on these loans as the originator.
I am amazed at the lending institutions. They don't want to give a mortgage to people who are retired, but have assets and a lifelong history of prudent finances. These same lenders seem to have little trouble with subprime mortgages, mortgages with virtually no down payment and ARMs that are very risky.
That's because the heavy hand of government is not pressuring them when it comes to senior loans.
I am amazed at the lending institutions. They don't want to give a mortgage to people who are retired, but have assets and a lifelong history of prudent finances. These same lenders seem to have little trouble with subprime mortgages, mortgages with virtually no down payment and ARMs that are very risky.
Think about this. These are for-profit institutions.
If you had a piece of property that you could sell for x-number of dollars at a decent interest rate, vs selling that same one with a jacked-up the interest rate, then re-sell at a higher price later (with higher interest) at a later date when the loan defaults, which would you choose?
Think about this. These are for-profit institutions.
If you had a piece of property that you could sell for x-number of dollars at a decent interest rate, vs selling that same one with a jacked-up the interest rate, then re-sell at a higher price later (with higher interest) at a later date when the loan defaults, which would you choose?
Nobody said life would be fair.
Generally banks and other lenders are not in the real estate business. They do not sell and resell property. In fact they want to avoid getting stuck with a house that the owners walked away from.
It seems to me that retirees with good financial history and assets should not need some sort of new program in order to qualify for a mortgage. That should be a no brainer versus the crappy mortgages that many institutions have issued.
One of my lenders has a new program and I've used it a couple of times already. Just came out in late April and it's basically "Assets for Income" but it is calculated based on your assets, credit score and it can be used with other income as well.
(1) Must have a 700 score
(2) Must have a 1 to 2 year history of managing the funds (Example: we will ask for your 12/31/2015 statement to show that you had the funds). Funds can be inherited but you have to have had them for 1-2 years.
(3) Calculation is based on the term of the loan - for example, if you are getting a 15 year mortgage, we use 180 months.
(4) We deduct annuity income but that could be used in other income.
(5) The assets must be at least 1 1/2 times the loan amount OR at least $500,000.00.
(6) All types of property but must be a primary or a secondary residence.
If you need more info, PM me and I'll send you a flyer. It's a nationwide program, rates are the same as the top program; it's a program through Fannie Mae but very few are offering it right now.
Hello Bette,
What does criteria (6) mean? I am guessing that the property being purchased must be a primary or secondary residence? Is this correct?
My experience matches Mathjak's comments. The lender was interested in income, not assets. I needed a substantial down payment and I had to start SS in order to be approved.
I am a little confused about the original post. It seems that there was a "pre approval" for a mortgage. We had the same thing. I believe the lender also used the term pre qualified. That turned out not to mean much. When it was time to actually get final approval, lenders still required sufficient income to qualify, regardless of assets. The so called pre approval or pre qualified amount turned out to be worthless.
Yeah, when we got our 2nd home they really could have cared less about assets other than for the down payment. Once they verified income most of the income it was approved. They approved before asset verification.
Retired in 2007 took cash no pension. Started my social security in 2009. Moved from Houston to plano near dallas and bought a home with a mortgage before selling out houston home, all this in 2010. Then I refinanced in 2014, home in houston was sold in late 2010 after buying the plano home. The key to both mortgages being approved were, steady deposit of monthly withdrawal from irs a into bank account. Substantial assets between irs and non Ira accounts. Finally finding a mortgage outfit which understand and did asset based mortgages.
Neither process was much fun, especially the first one where post crash regs were newer. The owning houston home while buying plano home was not a big issue just had to show where substantial down payment was funded. My social security was not a big deal as its small relative to other assets and income streams. I'm sure sterling credit rating helped.
Second one was easier than firs t by miles. Better mortgage broker and regulations settling are what I give credit
Last edited by Johnhw2; 07-03-2017 at 03:19 PM..
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See my post above
