Low income, high assests, and obtaining a mortgage (insurance, loan, 401k)

[willitwontit]

Hi all,

I'm looking for some input regarding my current situation. Presently I am in the market for a $400K-$500K home.

My financial situation is this:
1. The last two years I have averaged an income of roughly $40K a year from my job and investments.
2. I hold liquid assets (savings, stocks, etc) of $1.75 to $2 million.
3. I own a fully paid off condo worth $390K (that I intend to keep and rent out)
4. I have no debts or loans
5. A strong credit report and score.

I am wondering how difficult it would be for me to obtain a mortgage in this instance for a home in my price range due to my low annual income. Can the combination of high assets, no debts/loans, and solid credit make up some of the ground? Additionally, I am able to make a larger than 20% down payment, it's simply that I don't want to pay ALL cash again for another home.

Any insight or help would be greatly appreciated.

Thanks so much!

[Pfhtex]

Very recently, guidelines and niche portfolio products have brought some sense back into lending for persons with your financial profile.

Asset Depetion-based loans are possible, with as little as 20% down, with rates similar to typical market rates for persons with "normal" W2-based jobs.

What part of the country are you in?

[willitwontit]

Thanks for the reply,

I'm looking to move to Tennessee.

So when speaking to a broken they should be aware of possibilities for folks in my situation, or should I take the initiative and bring up asset-depletion based loans? Additionally, since this is new to me, would you estimate the price range I'm looking at be possible with such a loan and my current finances, or should I be setting my sights lower?

Thanks again!

[Pfhtex]

OK -

Can't use houses. Funds must be relatively liquid. Eligible Assets include stocks, bonds, and mutual funds.
Eligible Assets do not include assets bought on margin, options, warrants, IRA assets, 401K assets, annuities, insurance benefits, 529 or other education savings plans
The Base Pledge Amount equals the equity requirement
percentage multiplied by the property value; minus any equity or down payment.
The Initial Pledge Amount equals the Base Pledge Amount
multiplied by Two hundred percent (200%).
]The Minimum Pledge Amount equals the Base Pledge Amount
multiplied by one hundred sixty eight percent (168%).[A Pledged Asset Account funded with 100% Cash EquivalentAssets has an Initial Pledge Amount and Minimum PledgeAmount equal to 100% of the Base Pledge Amount]

Throughout the term of the pledge agreement, the obligor
will be required to maintain a Pledge Account value equal to the initial pledge amount.




Clear as mud?

[willitwontit]

Thanks. Definitely complex. At least I know I won't sound like a crazy person when I go to a broker / be laughed out of the office with my situation asking about a mortgage.

[michgc]

I don't know the answer but I will suggest to go to several different banks/mortgage brokers to ask for a loan. If one says, "no" go to another. My brother buys properties for investment and he will often go to 3 or 4 until he will get someone to agree to a loan. I'm not sure what his income situation is, but I think he has a high debt to income ratio because he has so many properties

[thelopez2]

Are you living in the condo now? Did you calculate the rental income in the 40k/year? A lender will need to see your tax returns and bank statements since 99% of borrows don't know how lenders calculate income when there is non w2 income.

Is your $1.75m earning less than $40k a year? That means you are earning less than 2.3% on your investments and intend to get a mortgage of at least 3-4.5%.

I think you have a good shot, but you are making your situation sound more difficult than it really is.

[andyo4you]

Hmm with 2 million dollar invested and making only 40k is really low...
Or

You are getting a lot of cash under the table and not paying taxes... Because if you are into properties you can make anywhere from 150k to 300k just in passive income a year. Then 10 years later up to 400k a year.

[andyo4you]

So my guess is that you are really making more than 150k a year or more and you can only prove 40k in real taxable money... Otherwise if it was true how on earth you will pay for a 2400 to $3000 mortgage with only $3000 or 4000 earnings... If the 40k is gross then you have less money coming in than your mortgage payment. Try paying a bit more taxes in order to qualify for a mortgage that high.

[thatguydownsouth]

Your income doesn't make sense and the bank is going to ask why you aren't managing your assets better. They'll probably even refer you to an in house investment department. 2 Million should be earning you a handsome income 3x what youre saying your income is. What is that 2 Million in? A savings account? Whats your income? Youre going to certainly raise some eyebrows with that application. These numbers don't add up.......