Do asset based mortgages exist? (loan, interest rate, credit score, rate)

[AllenM]

My wife and I want to relocate, sell our current house, and buy another. We are mid50s, retired, had minimal earned income the last 2 years, yet substantial investment income, enough to live on, including making payments on a decent size mortgage. All the investment income is documentable through account statements, but it is not all documentable from 1040s alone. Why? Because for some of our investment accounts, the investment income does not appear on our 1040s because there have been no taxable events. I don't want to pay cash for a house, because all the assets to do that would then be out of the investment market, and we want that investment income, which is at a higher rate than any mortgage's interest rate. FYI, our credit scores are excellent.

Does any one know of mortgage originators who want our good business?

We have tried our bank, and the people who hold our current mortgage, with no luck. They sell directly in to the secondary market, and will only consider people who satisfy the current Freddie and Fanny guidelines, and those guidelines forgot about people like us.

[chet everett]

Your situation is NOT unique and frankly I had a couple of sources for this but NOW they are ALL out of business! I think that they were done in by the assumption that all "no income verification" loans were the same ("liar's loans") and you will have a hard time getting over that right now -- basically without DOCUMENTED (1040) cash flow there only a handful of ways to accomplish what you wish to do.

The most obvious thing I can think of, if you truly do have enough assets in a liquid state is to literally "borrow your own money" through a combination of margin loans, secured CD loans and the like -- of course that assumes that the RATES and term of such loans make sense AND you have enough assets in accounts that would allow this... That might mean cashing in for capital gains AND that would be taxable so you'd be able to document the loan anyway!

The next best thing MIGHT BE a "hard money lender" but rates for that are still around currently TERRIBLY high UNLESS you are in state with anti-usury law that MIGHT cap these -- not sure that would be smart either.

The third most obvious thing is to explore a "relationship banker" -- typically they cater to VERY high net worth individuals (where your assets are WAY WAY into the seven or more figures...) OR those who have a family business that has similar value. It is not unheard of for such banks to have 'portfolio mortgages' that are at a competitive market rate BUT you are probably going to have your other assets into a trust that the private banker administrers and/or have a solid business relationship...

Good Luck!

[Daddys///M3]

There are lenders out there that will lend against investment portfolios. I have never had much use for a program that specialized since I mostly deal with first time buyers and government loans, but I can look into it and see if I can get you going in the right direction.

[AllenM]

Thank you so much for the replies.

I can try banks to see how much of my own money I can borrow against, to be able to buy the house with cash. But that sounds like a stretch, to be able to borrow that much. Plus, the long term length of a 30 year mortgage would have far lower payments than I suspect the much shorter terms those other loans would. I don't have assets in the 8 figures, or if I did, this would be far less of an issue.

I would be grateful to be steered toward some originators / lenders that have the flexibility to obtain my business. I have called some brokers and some institutions, and don't mind doing the leg work, but feel like I am shooting totally in the dark.

[Daddys///M3]

You have DM.

[kettlepot]

First Republic is one of those "Carriage Trade" banks that might do what you are asking. It's certainly something that wouldn't be foreign to them. Thornburg Mortgage would have originated a loan for you, but they are now out of business. Perhaps the company that holds your investment accounts would be interested. They might have an affiliated banking division.

[PatSea]

My wife and I are in a similar situation to what you have described. We ran into roadblocks with the larger lending institutions. We found the solution was in a small town savings and loan institution.

[cdelena]

I have been told that Bank of America will do stated income loans with adequate documentation.

[loweyecue]

Have you tried Federal Credit Unions? Pentagon Federal Credit Union has a program where they are not allowed to discriminate based on credit, not sure about no doc, but wortha phone call at least.