How to find a lender for this situation?

Question

This is a question about a primary residence. Is there a lender that would give us a mortgage in this situation: My husband and I would like to move to Frisco, TX and buy a home. The catch is that we would like to move even if neither one of us has a job yet or having sold our current home. We have substantial cash in addition to enough for a 20% down payment on a $400K house. Other details: Never been late on a mortgage payment (>20 years of mortgages both primary and rental property), 821 credit score and significant assets (>1,000,000....some in retirement accounts). Is there some creative way for me to get a primary residence mortgage in this case? My understanding is that post-2008 the rules are very strict. Would a portfolio lender have more flexibility? A credit union? Any other recommendations for a lender to contact?

Plan B is to purchase the Texas home as a second home and have one of us continue with our current employer and stay in our current home. Then once we get jobs in Texas, refinance to a regular primary residence mortgage. Is there anything we aren't thinking of with that plan or that we need to watch out for?

Any creative ideas to help us get into a house with possibly no income but substantial assets? I'm confident we'll find jobs quickly but, even if we don't, we have cash reserves. I just have to find a lender willing to take a "risk" on us. I'd love any creative ideas or advice. Thanks!

Lynn

Lynn Gallagher · Answer

@Andrew Postell

Yikes! I didn't realize it would be 2-3 points higher! Thanks for the tip about the Texas forum. I will definitely check that out. I didn't know that I had the whole year to repay my 401(k). Maybe that is an option for us to pursue. So, if I understand you correctly we could borrow the money from our accounts and pay cash for the house then refinance once we find jobs. Did I get that right? I will definitely research that as an option. Thank you!

Lynn Gallagher · Answer

@Ron Flatt

I would like his private information. Please forgive my newness...how do we privately message each other?

Lynn Gallagher · Answer

@Stephanie Irto

Thanks very much for the information! I appreciate the help!

Andrew Postell · Answer

@Lynn Gallagher thanks for posting this.  I hope you make it here to Texas and if there's anything you need please let keep in mind that we have a Texas forum that is pretty active too.  Just keep us fellow "Texans" in mind if there is anything we can do to help.

I think the crux here is not IF you can get a loan...but what type of a loan would you like?  What I mean is that sure, you can get an asset based loan as was described above.  Lot's of lenders have them but you do not get the same loan that everybody else gets.  The loan might be 2-3 points HIGHER than a traditional mortgage, it might be a 20 year loan, or it could be a variable rate....or all 3 of those.  But a traditional mortgage will carry the lowest rate and have the best terms.  So if you and your husband move here without a job, and then get a job 6 months later....I mean, you could still get an asset based loan...but then when you get your job, you would qualify for the better loan type.  So either, you can refinance, and pay all the closing costs over again...or just wait to buy.   OR your retirement plan should have an option where you can borrow against it, and pay yourself back when you are able to qualify for the traditional loan.  And if you can pay it back in the same year as you borrow it, you won't have a big tax hit.  There are lots of other avenues to  consider for sure.  I would be hesitant to be giving you a loan knowing you can get a SIGNIFICANTLY better loan within a few months.  But feel free to give further details, etc. and we will help as best we can.  Thanks!

Ron Flatt · Answer

I am currently using Joe Milburn with Texas Lending.  I can get you his email and private telephone if you need it.

I am in the oilfield industry and the income is high, low, and sometimes non-existent.  I am currently on my 3rd loan from him.

Stephanie Medellin · Answer

@Lynn Gallagher  Seek out a local (Texas) mortgage broker with access to asset depletion programs.  That's the type of program you want to ask for to qualify based on your assets.

Lynn Gallagher · Answer

@Harjeet Bhatti

Thanks for the response. Sorry, it took me so long to respond. It's been crazy with the holidays. Is it possible to get a personal asset-based loan? I thought they were reserved for businesses? That would be a great creative solution if it's possible. Would the interest rate typically be more, less or comparable to a 2nd home loan? Thanks for the idea!

Harjeet Bhatti · Answer

You can buy this home under assets based product. IRA and saving account is big help in calculating your income.  Purchase as 2nd home is also  a good option.

Lynn Gallagher · Answer

No, unfortunately. My husband is 54 and I'm 47. If we were, would there be a solution?