Senior seeking info about obtaining mortgage for condo purchase

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CULater
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Senior seeking info about obtaining mortgage for condo purchase

Post by CULater » Thu Jan 11, 2018 8:05 pm

I'm considering buying a small condo in Phoenix area, about $100K. Would like to purchase with a mortgage. I'm a senior citizen, retired. Outside of SS, all my financial assets are in retirement accounts. Being older and without the income from employment, just how hard is it to obtain a mortgage? Is the process different for someone like me; for example is a larger down payment likely? Where is the best place to shop for a mortgage? Would like to hear from any other seniors who have bought a property with a mortgage recently who can share what they learned.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

delamer
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by delamer » Thu Jan 11, 2018 8:17 pm

I don’t have any direct experience, but there are ways to use your assets to qualify:

https://www.kiplinger.com/article/retir ... tgage.html

CULater
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by CULater » Fri Jan 12, 2018 9:48 am

delamer wrote:
Thu Jan 11, 2018 8:17 pm
I don’t have any direct experience, but there are ways to use your assets to qualify:

https://www.kiplinger.com/article/retir ... tgage.html
Thank you. That article was very helpful.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

cadreamer2015
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by cadreamer2015 » Fri Jan 12, 2018 11:40 am

We did this when we bought our retirement home 14 months ago. Not every lending institution does asset depletion mortgages so you have to look around more. I found two mortgage brokers who did these mortgages as well as our regular bank - BofA. We ended up going with BofA as they had the best rate and terms.
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Carefreeap
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by Carefreeap » Fri Jan 12, 2018 11:46 am

cadreamer2015 wrote:
Fri Jan 12, 2018 11:40 am
We did this when we bought our retirement home 14 months ago. Not every lending institution does asset depletion mortgages so you have to look around more. I found two mortgage brokers who did these mortgages as well as our regular bank - BofA. We ended up going with BofA as they had the best rate and terms.
BofA won't be the cheapest but for your situation they may be the best option. There are still a number of brick and mortar branches in the Phoenix area which may be a good spot to meet your mortgage broker if you don't want to do everything over the phone. Plus I think it's easier to get a notary when it comes to signing the docs.

Are you taking RMDs? If you have SS + RMDs you may be able to qualify just on those sources of income.

The nice thing is that with so many retirees in the greater Phoenix area you should be able to find a retiree loan expert. What part of Phoenix are you buying in?

CULater
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by CULater » Fri Jan 12, 2018 12:47 pm

Carefreeap wrote:
Fri Jan 12, 2018 11:46 am
cadreamer2015 wrote:
Fri Jan 12, 2018 11:40 am
We did this when we bought our retirement home 14 months ago. Not every lending institution does asset depletion mortgages so you have to look around more. I found two mortgage brokers who did these mortgages as well as our regular bank - BofA. We ended up going with BofA as they had the best rate and terms.
BofA won't be the cheapest but for your situation they may be the best option. There are still a number of brick and mortar branches in the Phoenix area which may be a good spot to meet your mortgage broker if you don't want to do everything over the phone. Plus I think it's easier to get a notary when it comes to signing the docs.

Are you taking RMDs? If you have SS + RMDs you may be able to qualify just on those sources of income.

The nice thing is that with so many retirees in the greater Phoenix area you should be able to find a retiree loan expert. What part of Phoenix are you buying in?
Yes, I am taking RMDs now and on SS. Combined income from both was about $46K last year. I wonder where to look for a retiree mortgage broker? I am buying in the old Sun City area.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

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friar1610
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by friar1610 » Fri Jan 12, 2018 1:09 pm

Just a heads-up that obtaining a mortgage for a condo is a little more complex than for a single residence. You need to provide more documentation to the lender and the down payment may be higher. (This may well vary by lender.) We considered a mortgage for our condo but ultimately paid cash. Avoiding the additional hassles was one factor in that decision.
Friar1610

Carefreeap
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by Carefreeap » Fri Jan 12, 2018 10:16 pm

CULater wrote:
Fri Jan 12, 2018 12:47 pm
Carefreeap wrote:
Fri Jan 12, 2018 11:46 am
cadreamer2015 wrote:
Fri Jan 12, 2018 11:40 am
We did this when we bought our retirement home 14 months ago. Not every lending institution does asset depletion mortgages so you have to look around more. I found two mortgage brokers who did these mortgages as well as our regular bank - BofA. We ended up going with BofA as they had the best rate and terms.
BofA won't be the cheapest but for your situation they may be the best option. There are still a number of brick and mortar branches in the Phoenix area which may be a good spot to meet your mortgage broker if you don't want to do everything over the phone. Plus I think it's easier to get a notary when it comes to signing the docs.

Are you taking RMDs? If you have SS + RMDs you may be able to qualify just on those sources of income.

The nice thing is that with so many retirees in the greater Phoenix area you should be able to find a retiree loan expert. What part of Phoenix are you buying in?
Yes, I am taking RMDs now and on SS. Combined income from both was about $46K last year. I wonder where to look for a retiree mortgage broker? I am buying in the old Sun City area.
With a $3,833.33 income and a .38 back end ratio your total debt can total up to $1457/mth. Assuming you have no other debt and excellent credit you should have no problem qualifying for a $80k mortgage. At 4.5% I got a monthly P&I payment of $405. HOA fee and property taxes could be another $200/mth. You have plenty of room unless you have debt somewhere else.

If you are already in the Sun City area you shouldn't have a problem with someone at the local BofA having experience with retiree mortgages. If there's not one at your branch then they'll call someone to meet you at yours.

ResearchMed
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by ResearchMed » Fri Jan 12, 2018 10:23 pm

cadreamer2015 wrote:
Fri Jan 12, 2018 11:40 am
We did this when we bought our retirement home 14 months ago. Not every lending institution does asset depletion mortgages so you have to look around more. I found two mortgage brokers who did these mortgages as well as our regular bank - BofA. We ended up going with BofA as they had the best rate and terms.
Were you already taking RMD's or other withdrawals from retirement accounts?

When we looked into this some time ago, the lenders seemed to require 2 years of withdrawals.
Well, we hadn't needed to withdraw anything prior to that point, and we weren't yet subject to RMD's. So it didn't matter *how* much we had. If we hadn't already been taking distributions, we couldn't count anything in retirement accounts.
(Yes, were old enough that no penalties would apply.)

Is that still a problem for those who have all that saved up precisely because they never touched it yet?

As it turned out, for second home, it turned out that we qualified based upon income, but it was an eye-opener.

RM
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cadreamer2015
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by cadreamer2015 » Sat Jan 13, 2018 1:16 pm

We are not taking RMDs or other regular withdrawals from retirement savings. My self employment had been less than 2 years duration, so I was not able to use self employment income to qualify. Thus we used the asset depletion standard for qualifying for our mortgage.

By transferring $500k to Merril Edge temporarily we were able to cut .25% off the interest rate of our mortgage. Fortunately we locked the rate before the 2016 election and thus ended up with a 30 year fixed rate at 3.25% from Bank of America.
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dm200
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Re: Senior seeking info about obtaining mortgage for condo purchase

Post by dm200 » Sat Jan 13, 2018 1:23 pm

I believe, as well, that lenders for condo mortgages may be restricted to a limited and select group.

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