topic Re: Getting a mortgage in retirement in Home

Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 04:14:12 GMT

I have a silly question. If you are applying for a mortgage and you retire say the same month. So you won't start getting your monthly income off your retirement account until August 1st. Would that person have to show two months worth of those deposits in order to include that in the monthly income. What does the bank need from the financial advisor? Would they need to know how much your going to be getting a month? What if your pension your getting in a lump sum and the rest of your 401k haven't been put in that account yet. Is a letter from your financial advisor guaranteeing a certain monthly income enough?

Re: Getting a mortgage in retirement

JeanLouiseFinch — Fri, 14 Jul 2017 09:22:12 GMT

@ccassaday wrote:
I have a silly question. If you are applying for a mortgage and you retire say the same month. So you won't start getting your monthly income off your retirement account until August 1st. Would that person have to show two months worth of those deposits in order to include that in the monthly income. What does the bank need from the financial advisor? Would they need to know how much your going to be getting a month? What if your pension your getting in a lump sum and the rest of your 401k haven't been put in that account yet. Is a letter from your financial advisor guaranteeing a certain monthly income enough?

Hardly "a" silly question. It seems you have several questions. These are things you need to be asking someone in the mortgage department of your bank.

Re: Getting a mortgage in retirement

bonnielu — Fri, 14 Jul 2017 09:25:57 GMT

Your bank would be the best source to ask. And I would think lots of things would come into play, as in past financial history.

Re: Getting a mortgage in retirement

Nataliesgramma — Fri, 14 Jul 2017 09:53:21 GMT

Depends on the Bank and if you have been a customer...have savings and checking there....but you need to ask them ASAP.

Re: Getting a mortgage in retirement

AuntG — Fri, 14 Jul 2017 11:12:37 GMT

Who would seriously want to take out a mortgage in retirement? It happened to a pastor I know. His housing was always covered by the church, but once he retired, he decided to build his dream home. At age 85, he still has house payments and property he can no longer maintain.

Re: Getting a mortgage in retirement

151949 — Fri, 14 Jul 2017 11:52:05 GMT

@AuntG wrote:
Who would seriously want to take out a mortgage in retirement? It happened to a pastor I know. His housing was always covered by the church, but once he retired, he decided to build his dream home. At age 85, he still has house payments and property he can no longer maintain.

Some people can afford to pay a mortgage in their retirement, and actually benefit from the tax break.Just because this one person made a foolish mistake doesn't mean it is wrong for everyone. You have to judge by your own income and finances.

Re: Getting a mortgage in retirement

151949 — Fri, 14 Jul 2017 11:56:55 GMT

OP - when we purchased our current home we applied for a mortgage in case our house did not sell, and we only based our income on our SS and pension incomes, which was adequate. Every case is different - I'm sure the lender has explained to your folks exactly what information they will need.

Re: Getting a mortgage in retirement

Anonymous — Fri, 14 Jul 2017 12:03:18 GMT

This post has been removed by QVC because it could be considered political

Re: Getting a mortgage in retirement

reiki604 — Fri, 14 Jul 2017 12:08:39 GMT

Since this question is clearly about your parents. why not let them worry about it. They are responsible adults. Why give yourself something else to obsess about. It is out of your control and up to them. There is nothing you can do about it but give yourself aggravation for the sake of being aggravated.

Re: Getting a mortgage in retirement

Peaches McPhee — Fri, 14 Jul 2017 12:15:17 GMT

I think you need to be upfront with the mortgage people and tell them about your pending retirement and your new "income". They will probably ask for statements from your retirement accounts. They will want to see your total assets as well as your pending pension income.

Your financial advisor will never provide a letter guaranteeing any income.

Re: Getting a mortgage in retirement

Bri36 — Fri, 14 Jul 2017 13:12:41 GMT

I'm sure your dad has talked with his financial advisor and the people at the bank about all of this.

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 13:45:26 GMT

@AuntG wrote:
Who would seriously want to take out a mortgage in retirement? It happened to a pastor I know. His housing was always covered by the church, but once he retired, he decided to build his dream home. At age 85, he still has house payments and property he can no longer maintain.

If your investments are making 5% the interest you get from having say a million in the account pays for that mortgage. Why would you take the money and pay cash and 30% tax on it when it can be making money for you.

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 13:48:40 GMT

I am sure the credit union has gone over everything with them. It was just something I was reading when using your monthly retirement as income. It was saying you had to show it as being deposited for two months. The financial advisor was supposed to send something over showing the amount they will be getting every month.

Re: Getting a mortgage in retirement

151949 — Fri, 14 Jul 2017 14:35:51 GMT

@ccassaday wrote:
@AuntG wrote:
Who would seriously want to take out a mortgage in retirement? It happened to a pastor I know. His housing was always covered by the church, but once he retired, he decided to build his dream home. At age 85, he still has house payments and property he can no longer maintain.
If your investments are making 5% the interest you get from having say a million in the account pays for that mortgage. Why would you take the money and pay cash and 30% tax on it when it can be making money for you.

When we bought our trailer we intended to use earnings from our savings to pay cash for it. Our financial advisor said no - use a home equity line - deduct the interest and I'll make more for you on the money left with me than the interest you'll pay - he was absolutely right. It was great advice.

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 14:49:55 GMT

@151949 wrote:
@ccassaday wrote:
@AuntG wrote:
Who would seriously want to take out a mortgage in retirement? It happened to a pastor I know. His housing was always covered by the church, but once he retired, he decided to build his dream home. At age 85, he still has house payments and property he can no longer maintain.
If your investments are making 5% the interest you get from having say a million in the account pays for that mortgage. Why would you take the money and pay cash and 30% tax on it when it can be making money for you.

When we bought our trailer we intended to use earnings from our savings to pay cash for it. Our financial advisor said no - use a home equity line - deduct the interest and I'll make more for you on the money left with me than the interest you'll pay - he was absolutely right. It was great advice.

That was my parents plan. They were going to pay cash for the house. Financial advisor talked them out of it.

I guess my main question is if the income isn't going to start coming in until August 1st it won't show up on the two months bank statements. I was just wondering because of what I have reading if it has to be on there as a deposit or does a letter from financial advisor stating when it starts and how much all that is needed.

Re: Getting a mortgage in retirement

Lynnster67 — Fri, 14 Jul 2017 14:56:56 GMT

It depends whether you're looking for a traditional mortgage or a reverse mortgage (for ppl aged 62+).

If you're looking for a reverse mortgage, you have the option of taking a lump sum or as a line of credit. The upfront fees are significant and you're required to take a financial counseling course to make sure you understand that you're still on the hook for taxes, insurance, and HOA/condo assessments.

Re: Getting a mortgage in retirement

RespectLife — Fri, 14 Jul 2017 14:57:05 GMT

@ccassaday wrote:
I am sure the credit union has gone over everything with them. It was just something I was reading when using your monthly retirement as income. It was saying you had to show it as being deposited for two months. The financial advisor was supposed to send something over showing the amount they will be getting every month.

@ccassaday

I can only speak for our circumstance. A letter from your advisor or an accountant would not be acceptable in NYS.

My DH retired from NYS. The New York State Teacher's Retirement provided a document showing exactly how much would be deposited each month. It HAD to come from the one actually PAYING the retirement.

But as others have stated, your lender should be telling you exactly what you need to provide for documentation. Every state and every lender may have their own set of requirements and acceptable documents.

We are taking a mortgage at this age because financially, it is the smart thing to do.

Our accountant reamed me up and down years ago when I paid off the previous house mortgage. And every year, when I wrote a large check for yet still MORE taxes due....I knew he was right.

We need the tax deduction and the mortage rates are still low! Your early years in a mortgage is paying mostly the INTEREST so the deductibility is high.

Why pay cash and then let the government (esp. NYS eat us alive every April!!)

We have paid enough taxes all these years to support a small nation! LOL

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 15:30:23 GMT

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 15:36:01 GMT

@RespectLife wrote:
@ccassaday wrote:
I am sure the credit union has gone over everything with them. It was just something I was reading when using your monthly retirement as income. It was saying you had to show it as being deposited for two months. The financial advisor was supposed to send something over showing the amount they will be getting every month.
@ccassaday

I can only speak for our circumstance. A letter from your advisor or an accountant would not be acceptable in NYS.

My DH retired from NYS. The New York State Teacher's Retirement provided a document showing exactly how much would be deposited each month. It HAD to come from the one actually PAYING the retirement.

But as others have stated, your lender should be telling you exactly what you need to provide for documentation. Every state and every lender may have their own set of requirements and acceptable documents.

We are taking a mortgage at this age because financially, it is the smart thing to do.
Our accountant reamed me up and down years ago when I paid off the previous house mortgage. And every year, when I wrote a large check for yet still MORE taxes due....I knew he was right.

We need the tax deduction and the mortage rates are still low! Your early years in a mortgage is paying mostly the INTEREST so the deductibility is high.

Why pay cash and then let the government (esp. NYS eat us alive every April!!)

We have paid enough taxes all these years to support a small nation! LOL

I guess we will see what happens. There's is set up to receive a guaranteed amount for life. They will be getting the money directly from their financial advisor I think. They had to provide all the banking info to them for direct deposit. So I think they are the ones directly paying it. They have sent in all their documentation the credit union asked for. We should be hearing from them anytime. The appraisel is done.

Re: Getting a mortgage in retirement

ccassaday — Fri, 14 Jul 2017 15:48:32 GMT

I guess my big question will the loan not be able to close until they show those annuity payments on two months bank statements. Or will a letter stating they start August first and the amount be sufficient.