Posted on 09/05/2011 9:59:09 PM PDT by chuckles
I am in the middle of refinancing my home. I expect an answer this week. The problem is, the mortgage company seems nervous about my income. I live off trading stocks and options in a self directed IRA. I have little or no income otherwise. I am borrowing about 3/4 of what the house appraised, so the payment will be within $20 of what I'm paying now. I have an 800 credit score. They have contacted me twice about proving my income. They have asked for my 1099's and my 1040's to prove my income. I explained to the person assigned to my case that I just take out the money I need to pay my bills and transfer that to my checking account. She kicks the info to the underwriter and they kick it back asking for more info. I tried to explain to them if they need another $5k income to approve me, let me know and I will withdraw anther $5k-10k and pay the tax on it, but that seems to not compute if you are retired without a steady income. I have over 3 times the amount I'm asking for in my IRA so they are covered there and the house appraised for well over what I'm asking. I can't imagine what they are worrying so much for. I take out whatever it takes to pay my bills so hypothetically, I have almost unlimited income. If I need $50k to live on, I take that out, if I need $40k, I take that out. it just depends.
My question is,.....If they refuse the loan, what are my options? I want to refinance with the rates this low and may use the money to buy some acreage because raw land charges more interest than a home mortgage. Either way, I want the loan for the lower interest. I don't want to resort to a lawsuit, but I don't even know if they have to loan the money unless I'm a minority.
They may make the loan, but it just seems like they don't want to and I want to be ready if they don't.
” I live off trading stocks and options in a self directed IRA”
How is that possible, I thought IRAs are untouchable unless you are willing to pay a penalty.
Are you retired? If so, why even refinance?
First relax. Second, don’t waste time or energy on a lawsuit. Might as well flush it down the toilet.
Banks are paranoid + now. We don’t need to get into their BS. They want to see stability. They want consistency. And they want security. Your saying ‘you will just take $X more’ may spook them more than console them.
If you have a mortgage broker, and they are not managing this and answering your questions, they are not doing their job.
Your option. 1) Appeal to the loan committee; 2) offer more collateral (I would not do this); 3) Personal guarantee (definitely do not do this) or 4) go to another lender. Use an experience mortgage pro. Most are paid by the lender, not you, and you can ask up front. Who did your friends use? Did they like them?
Remember - bankers think they are gods right now. But in the end they are ‘just bankers’. No better than the butcher, the garbage man or the mayor. Just a guy, or girl, doing a job and hoping to keep it.
Be patient. Document what you can. Ask them for suggestions but avoid the cross collateral and the personal guarantee. Your loan is 75% LTV. Ask if 70% would seal the deal (you come up with 5% more down payment).
Forget about ‘em. They don’t really want your business. Either that or they are being hyper-controlled from outside to the extent that it makes it unreasonable to engage in commerce. The people who are at the levers do not want an expanding flowing economy. They do this stuff and then blame Repubs, or claim that banks and other richies are sitting on the money. This not a good environment for normal commerce. Personally I am on cash only basis. No more loans. No more re-fi’s.
We shouldn’t have to submit to an anal probe or surrender our left testicle to engage in normal commerce. This is the way they want it.
If you are actually making money inside your IRA, show them your IRA statements for the past 3 years.
If they refuse to give you the loan, go to another bank. Different banks have different requirements, though in general it’s much more difficult to get a loan these days.
Wow chuckles, Day Trading is a tough business. Anyhow, When you pull the money out its technically a loan not income. They are looking for income and you have none. Loan Decline unless of course you can find a income stated loan. In that case the loans approved.
The problem is the underwriter. See if you can contact him/her directly.
Have you checked into more than one bank? We had one give us the run around for a relatively small home improvement loan (with almost 100% equity in the house!) and another approved us within 24 hours and it took a week or two to get our check, at a decent rate.
There are still plenty of banks and mortgage companies. You could even apply to several at the same time, if you are willing to pay a few extra hundred bucks, that you will lose, if you don’t take their loan, but it may be worth it.
Check out this website, they have a lot of mortgage companies and banks listed.
You already hit the nail on the head. You’re not a minority. Banks are freaked out now over potential lawsuits for WHO gets their money.
I have retired friends who have the cash money to buy foreclosed homes. They contact the banks to buy, the banks delay, delay and won’t even take their cash...they’re the wrong color.
This administration through its intimidation games has a chokehold on the banks right now. They fully intend to direct direct ALL the cash to the places that are either their union friends, or somebody who will give them a vote.
Nine will get you ten, that mortgager even knows who you gave a political donation to.
“I have retired friends who have the cash money to buy foreclosed homes. They contact the banks to buy, the banks delay, delay and won’t even take their cash...they’re the wrong color.”
Wait, do you mean *cash* — the total amount needed — and they still can’t buy the homes?
The bank won’t (shouldn’t) even look at the IRA. Using an IRA as collateral for a loan results in the amount of collateral being treated as a “deemed distribution” which would result in a taxable event to you just like if you had withdrawn that amount.
Plaidness had the right idea in trying to get the LTV to a point where the bank is happy. Of course, if you are making a better rate in your IRA than the refi will be for then why refi?
Yes...they’ve had offers on three homes they want to buy for rental income now for six months.
Because they are the wrong *color*? Did any banker tell them that? That’s outrageous.
If they want retired people living off interest and dividends, I'm sure it's few and far between that can get a loan nowdays.
A couple of the replies seem to not understand IRA's. I hate to say it, but I get that feeling from the underwriters questions also. They asked how I get the money as I'm not old enough yet. You can withdraw money any time as long as you pay a penalty if you are under 59 1/2. I chose to not get a 72T to keep my freedom. I was able to take out $100k averaged over 3 years without penalty after Hurricane Rita. The other 6 years I just paid the penalty. Now I'm over 59 1/2, so no more penalty.
I try to make over 20% per year on my money with options. This next 2 weeks alone I should make 4% as I sold calls and bought puts in this pitiful market. Tuesday should be wonderful as the futures show nearly -300. I will buy back the short calls and sell the puts and get the %4 tomorrow if all goes well. The coup de gras will of course be Thursday after the big speech. I had a good month in August also. The last few month before that were slim pickings however. I'm not actually a day trader. I'm kind of a few days to a couple of weeks trader. I think we will go to a double bottom around 1101 in the S&P and then I will look again.
I don't really need the loan, but I just can't see passing up a 4% loan. I expect in the next few weeks we will fall under 2% again on the 10 year. We could get as low as 1.5% which would make my loan under 4%.
One poster suggested I just forget it and try again with someone else. Wouldn't I be charged the fee's again possibly for the same result?
Well, I've been "loaning" myself money for 9 years now, since I was 50. You can call it a loan and pay the money back if you want to avoid the penalty. I don't mind the taxes and penalty because it's less than I paid working. It's just how you look at things. I took a lump sum from my work when I retired, so this is all the money I have to work with. I don't get Social Security yet and no retirement pension. I also have money that is in a taxable acct. from my stock trading, but I can't live on it without taking from the IRA.
Tell them you are an illegal alien and that you will sue them if you don’t get the mortgage.
You will have the money within 12 hours.
Just tell the underwriter that your name is Sam Meanie and you were wondering just how hurtin’ he was for a loan.
Interesting,
Just heard of a very similar case with a 35+ year client of Citibank.
Due to a late payment of one of their children (on their overdraft line, on which they are a co-signer), all of a sudden their equity line was withdrawn. (just dissapeared!), and when they appealed to the bank, (also, mortgage never late, almost paid off totally,)they were refused.
They wrote the bank, saying that this nonsense would lose them a perfect client, they wouldn’t budge.
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