Orlando Mortgage Blog

You have faithfully been putting money away for years into some type of retirement account such as your 401K, IRA, Annuity or others. You do not yet have a track record of pulling money out as regular income. But, now you want to be able to use these accounts as income to qualify for a mortgage.

It doesn't matter whether you are wanting to refinance or buy a home, it will take some definite planning to structure it so a lender will be able to use it as reliable income to qualify you for a mortgage. Remember, you can't prove a track record yet that you have been receiving it on a structured reliable basis that any lender must prove in order to be able to count it. Some folks become spendthrifts when they begin accessing these type accounts. So how do you get past this risk?

Any income that is used under conforming mortgage underwriting guidelines must have a track record of being received by you in a consistent manner and have a reasonable expectation of continuance for 36 months or more. Right now, the retirement accounts above are "asset" accounts not income. There's no proof you can manage it well.

So how can they be used as income for a lender? First of all, they have to be set up by written agreement with the account holder to disburse a set amount monthly to you, then prove the payments have begun, deposits of the monies proven, and that there be sufficient funds in the account source to maintain the disbursements for a minimum of 36 months after the mortgage applied for has closed. Additionally, not all lenders have the same required standards of how long you must prove you have been receiving the monthly funds. This is called "seasoning". Generally, proof you have been receiving the funds for 6 months is expected as the seasoning norm. But, you want to buy the home now. It can be done by proving all the above, but only have to prove you have received and deposited at least one month before loan approval. It's just a matter of knowing where I can send the application for lender approval. Another reason to call me today.

Bill Wilbanks