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A friendly local bank or credit union will lend on your equity, income props and your residence. My banker was very complimentary of my income props and willing to lend to 70% based on rental income as my only source. My mom got a new 30yr loan at age 85.
If you are quite a ways from 59.5, you can do some 72t withdrawals (stiff rules apply)
I consider a HELOC on primary residence, (or rentals) or a margin acct on brokerage as accessible sources for cash needs. I have used both since I left employment 10 yrs prior to age 59. Plus other creative ways to get cash for living. (Plenty challenging with $20k property taxes and even higher medical premiums) both of those changed dramatically after I left employment.
We used a large HELOC on our primary home before we retired to build our retirement home on property that we already owned. We looked at this as a viable option for us for a number of reasons. The mortgage on the primary home was paid off ( done in 2000), it was during the real estate boom around 2003-2006 or 7, so our bank was more than happy to give us the HELOC, actually for amounts higher than we wanted. We compared construction loans with the HELOC but found we had more control of the HELOC money than we would have had with the loan, and it was easier to get. We were both working, and
the income was good, there was also quite some delay on getting the retirement house built ( mainly supply, manpower issues due to massive rebuilding after Hurricane Charley and other hurricanes in 2004-5 mopped up the state of Florida,). Took 4 yrs to get that house finished.
So we used the HELOC to pay off other debts ( once we ensured there was enough money to pay on the construction draws). We used it to pay off our car loans, pay cash for a new one, pay for repairs on the primary residence, finally putting a new roof on that house about a year before we sold it. Without too much in the way of debt and good income we always made hefty payments monthly towards the HELOC. Even still when it came time to sell our primary house ( having completed the co nstruction of the retirement house, paid off the contractor and related debts), we were fairly close to owing the upper limit of the HELOC amount. But we sold the primary house for the asking price, which gave us enough money after expenses to pay off the HELOC and still make close to a $200,000 profit. And we ended up with a new house we own free and clear, for our retirement.
I don't know if this would be a viable option for many people, we did it because our retirement goal was to be as free of debt as posssible. The HELOC was the mortgage for our primary house, and with a good income stream, the length of time it took
to build the retirement house ( amounting to extended times between construction draws, thanks to an honest contractor), we were able to use the HELOC money for other debts and expenses, and replace it fairly quickly.
Aslowdodge, just get a mortgage broker to help you. Often your real estate buyers agent has one they have worked with often, which gives you a head start in my opinion.
There are indeed asset backed mortgages. But sometimes you get a little better deal going conventional if you can put a larger down payment to reduce the loan amount. I also recommend that if you have an IRA or an annuity or similar that you arrange a monthly distribution that you count as part of your “income” along with other regular stuff like social security, pensions, etc. Do that asap so you have a few months of history.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Originally Posted by luv4horses
Aslowdodge, just get a mortgage broker to help you. Often your real estate buyers agent has one they have worked with often, which gives you a head start in my opinion.
There are indeed asset backed mortgages. But sometimes you get a little better deal going conventional if you can put a larger down payment to reduce the loan amount. I also recommend that if you have an IRA or an annuity or similar that you arrange a monthly distribution that you count as part of your “income” along with other regular stuff like social security, pensions, etc. Do that asap so you have a few months of history.
So were the loans based just on assets owned or were they counting cash flow?
I didn't ask them what they based the loan on. You see, the bank and I have an agreement. I don't ask them how they make their loans and they don't ask me how I do my investing.
I have found this thread very educational! Just today we have settled on a property and the whole process turned into a total nightmare because of the bank’s reluctance to lend to me. We were looking at a loan comprising 3% of my assets so it came as a shock. I own a vacation rental and they will only count half the income of that in their equation. I do not pull down my retirement income as we share our money and have done so for 45 years. Our system allows me to take any amount from the account tax free but not to recontribute at my age.
Anyway we decided to go with the whole loan being my husband’s and I needed to be guarantor. Which has to be signed by a lawyer. With me having had Covid and husband in isolation, this became a logistical problem.
So the bank sent faulty documents which had to redone, the online ones had to be redone again, the whole thing had to be escalated on Monday as it still was not complete (the loan centre is in Adelaide and some documents are still paper ones) Yesterday our lawyer got word that the loan was approved but this morning (settlement day) the bank paid in the wrong amount, the vendor disputed details that did not concern us and to top it all, this afternoon our contribution disappeared from the settlement account. Finally found in some holding account. So settled six hours late.
Our conclusions from this, at this stage my husband is forbidden to even think about any more sales or purchases of real estate. Unless he wants a dog house for him to occupy.
Secondly, if there is no alternative, use a small bank, not one which outsources half their work to India and where nobody is prepared to make a decision.
Thirdly, never again have a settlement so close to Christmas or when there is a pandemic.
Fourthly, use a mortgage broker ( our loan is so small it is hard to find any who are interested)
Finally, drink good wine and eat chocolates to recover from the process. Accept that the process in this digital world is much more difficult than in the olden days. Get over it!
I have found this thread very educational! Just today we have settled on a property and the whole process turned into a total nightmare because of the bank’s reluctance to lend to me. We were looking at a loan comprising 3% of my assets so it came as a shock. I own a vacation rental and they will only count half the income of that in their equation. I do not pull down my retirement income as we share our money and have done so for 45 years. Our system allows me to take any amount from the account tax free but not to recontribute at my age.
Anyway we decided to go with the whole loan being my husband’s and I needed to be guarantor. Which has to be signed by a lawyer. With me having had Covid and husband in isolation, this became a logistical problem.
So the bank sent faulty documents which had to redone, the online ones had to be redone again, the whole thing had to be escalated on Monday as it still was not complete (the loan centre is in Adelaide and some documents are still paper ones) Yesterday our lawyer got word that the loan was approved but this morning (settlement day) the bank paid in the wrong amount, the vendor disputed details that did not concern us and to top it all, this afternoon our contribution disappeared from the settlement account. Finally found in some holding account. So settled six hours late.
Our conclusions from this, at this stage my husband is forbidden to even think about any more sales or purchases of real estate. Unless he wants a dog house for him to occupy.
Secondly, if there is no alternative, use a small bank, not one which outsources half their work to India and where nobody is prepared to make a decision.
Thirdly, never again have a settlement so close to Christmas or when there is a pandemic.
Fourthly, use a mortgage broker ( our loan is so small it is hard to find any who are interested)
Finally, drink good wine and eat chocolates to recover from the process. Accept that the process in this digital world is much more difficult than in the olden days. Get over it!
Best part of your story. Can't go wrong with wine and chocolate.
I have found this thread very educational! Just today we have settled on a property and the whole process turned into a total nightmare because of the bank’s reluctance to lend to me. We were looking at a loan comprising 3% of my assets so it came as a shock. I own a vacation rental and they will only count half the income of that in their equation. I do not pull down my retirement income as we share our money and have done so for 45 years. Our system allows me to take any amount from the account tax free but not to recontribute at my age.
Anyway we decided to go with the whole loan being my husband’s and I needed to be guarantor. Which has to be signed by a lawyer. With me having had Covid and husband in isolation, this became a logistical problem.
So the bank sent faulty documents which had to redone, the online ones had to be redone again, the whole thing had to be escalated on Monday as it still was not complete (the loan centre is in Adelaide and some documents are still paper ones) Yesterday our lawyer got word that the loan was approved but this morning (settlement day) the bank paid in the wrong amount, the vendor disputed details that did not concern us and to top it all, this afternoon our contribution disappeared from the settlement account. Finally found in some holding account. So settled six hours late.
Our conclusions from this, at this stage my husband is forbidden to even think about any more sales or purchases of real estate. Unless he wants a dog house for him to occupy.
Secondly, if there is no alternative, use a small bank, not one which outsources half their work to India and where nobody is prepared to make a decision.
Thirdly, never again have a settlement so close to Christmas or when there is a pandemic.
Fourthly, use a mortgage broker ( our loan is so small it is hard to find any who are interested)
Finally, drink good wine and eat chocolates to recover from the process. Accept that the process in this digital world is much more difficult than in the olden days. Get over it!
"use a small bank, not one which outsources half their work to India and where nobody is prepared to make a decision."
I think that's pretty much the key to hassle-free loans. Deal with a bank that handles their loans in-house, not with a bank that sells the paper (loans) to mortgage buyers. When the banker recognizes you when you walk in the door and calls you by name, and when they know that you are an extremely safe credit risk, then you can get nearly any kind of loan you want (within reason) with very minimal paperwork or delay. Those type banks are getting harder to find, but there's still a few around.
"use a small bank, not one which outsources half their work to India and where nobody is prepared to make a decision."
I think that's pretty much the key to hassle-free loans. Deal with a bank that handles their loans in-house, not with a bank that sells the paper (loans) to mortgage buyers. When the banker recognizes you when you walk in the door and calls you by name, and when they know that you are an extremely safe credit risk, then you can get nearly any kind of loan you want (within reason) with very minimal paperwork or delay. Those type banks are getting harder to find, but there's still a few around.
Until they get bought up and merged with some faceless conglomerate bank. We were so happy with the local branch of our regional bank. We knew the manager (our neighbor), the loan lady, and most of the tellers. Recently they were bought up, and now it's like a whole new place where we are anonymous.
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