Using your retirement assets to qualify for a home loan
Mortgage banker: Jay Tolisano
Property type: Primary residence
Home value: $457,000
Loan amount: $342,750
Loan terms: 7/1 ARM percent
Back story: Jay Tolisano received a call from a prospective client looking to refinance his home. The client wanted to tap into some equity in his home, which currently was paid off and had no mortgage.
The challenge that the client was finding was that he was unable to qualify based on his income from his business, as it was about to close for good. The customer had run the business for many years, and retirement was upon him.
The client talked to a few different sources about refinancing his home loan and was unable to find success.
Tolisano’s initial call was over the phone, so he set up a face-to-face meeting with the client to fact find and learn more. Upon meeting with the client, Tolisano confirmed that qualifying based on a traditional tax return approach of using self-employment income would not work in this case due to a few factors, and of course, the primary factor being that the business was due to close in the coming months.
However, in reviewing the tax returns Tolisano found other potential sources of income, and in reviewing the entire file, he found that the customer had plenty of retirement assets. At the time, those assets were not being utilized by the client for cash flow purposes because the business was still open, but those assets could prove useful.
The solution: Tolisano spoke with the customer about his plans for using the retirement assets in the future and during his retirement. Tolisano recommended he speak with his financial adviser and Certified Public Accountant about setting up an automatic distribution from the retirement assets.
The automatic distribution would create a monthly income stream that would allow the customer to qualify for the loan and have the necessary cash flow per month to handle his bills.
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After being told by three different companies that the customer could not get a loan, he now had a smile on his face as he could achieve his personal goals and tap into some of the equity in his home.
There is always a story, and if you dig deep, ask the questions and listen, there is likely an answer and solution.