im sure this will get salooned and rightfully so...just wanted to post it here to get some eyes on it to see if any can offer advice. im getting ready to get a house with my on again off again girlfriend. i have the money for the down payment but she has the steady income flowing in through her job. im thinking of just applying for the loan myself but have a bit of a situation. I have plenty of money to pay for the house outright, I'd rather not as those funds are tied elsewhere, so my question is, if i put 100,000 down on a 250,000 house, how much income per month do I need to show to get the loan for the rest and for how long? I have no steady income coming in as i just take money from my trust whenever I need it. so is a banker gonna tell me I need to transfer lets say, 5k, from my trust to my personal account every month to show i have money coming in? is there a way around this? is i want to get the house in the next couple of months and I know a lot of banks want to see steady income for months on end before approving a loan.
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why would you want to pay the interest on a loan if you have the liquidity?Comment -
They are going to request 2 years of income verification. Anything less will require an exception, letter from your trust administrator, new employer, etc.
Responding to Mud, depending on your cash flow situation you might want to take a mortgage. Make sure to take at most 80% to avoid the PMI or similar cost. If you can do better than 3.75% with the money elsewhere you'd be well off to take the mortgage.. after the mortgage interest deduction you are crushing the cost of paying interest if you can earn even 1-2% ROI in other investments. Not to mention if you are currently taking the standard deduction and are on the cusp of itemizing using the mortgage interest deduction to get you there can actually cause you to save tax dollars. Dunno if that's the situation here.Comment -
because if I pay the house in full that would leave me with about 20k until I get my next installment from the trust in a few yearsComment -
see thats the thing, it was life insurance money that was sitting in a trust collecting meager interest. i also have 94k in an investment account but id rather not touch that as its doing pretty well in the market. i am the trustee of my trust account. so im basically trying to find info if its possible to get a loan when you have enough money but no income coming in on a monthly basis.Comment -
Actually, upon re-reading it looks like your trust and documented assets might exceed the purchase price of the house. As long as you aren't limited by a spendthrift provision, which it doesn't sound like from your "take money whenever I need it" the lenders will be happy to lend since a trust w/o a spendthrift can be subject to a lien and thus your total assets are the fallback should you default. All they care about is ability to get their money.
Just call a mortgage broker and tell them your sitch... you'll prolly do much better with a local or a credit union vs. a major chain (Quicken Loans, Wells Fargo, etc.) but it pays to shop around.Comment -
Oh... hrmm. Could be tough with an installment trust and no other regular income. Then again, borrowing 150k at 3.75 with a 700+ credit score (assumption here) shouldn't require much.
I just got pre-approved for amounts that made my head spin. The process was painless, although it did cause a hard-pull on my credit report. Just start the conversation... these people are in the business of giving out money, if there is some way they can make it work, they'll tell you how.Comment -
It's tough world right now in the lending market.
If this were 2006, yes, you could get a loan with your signature and a pulse.
Today, it is going to be difficult. Not impossible, but difficult. How attractive is your credit score?
The less predictable your income, that is, the "how/when/how much" you get paid, the more security a bank is going to want. I have a client who has an internet business. Large ebbs and flows to his cash flow. Holiday months are very good, some other months very poor, even operating at a loss. He managed to get a new home loan, but the bank/lender required a significant deposit, almost 55% of the property value.Comment -
Now is not a bad time to carry a mortgage. Interest rates are really low, so having the liquidity elsewhere is a better option. You also get tax benefits with your mortgage anyway. If the OP is putting 40 or 50% down there he will have very little problem getting a loan, even with little income.
Just make sure it is your house, do not put on again off again girlfriend on itComment -
thanks Boner, Sam, JamesComment -
Ask one of the guys in points forum they're superb with loans.Comment
