Negotiations Tactics for First Time Home Loan

[Eric Sender]

I'm sure a question like this has been answered but I wanted to formulate the question on my own.

I have been working since I graduated college and work for a defense contractor and I feel its a job that could take me all the way to retirement (who knows though!). I make a descent middle class wage, fund a 401k, a ROTH IRA, as well as expect social security to come in.

All in all, after doing some finical calculations based on projected earnings and average retirement account/401k growth over the next 30 years, I should actually have a healthy retirement. However, for now, I am 32 years old and all the projections assume I am continually employed, etc.

Now all that said, I do live in San Diego where homes can be $500k at their cheapest, if not $1+M. However, when you look at my projected income through retirement, I should have that money made in my lifetime. 

Is there a way I can negotiate a loan that uses the fact that:

• I make a consistent wage every 2 weeks
• I expect to have a IRA + 401k + Social Security that will pay $X/month in retirement
• I have a Roth IRA which can act as a down payment
• I am also an FHA candidate.

To create a loan that is:

• Not tied to exactly 30 years, but could be (maybe) 45 years or a loose end
• The goal would by that my monthly payments would be about 25% of my income
• Also, I am interested in quadp-lexes where I could rent out 3 of the units. These can cost $1-2+M I think... so I would definitely need a loan which is creative and accommodating.

Basically, I have been looking into homes and seeing the need for either an outrageously large down-payment or extremely high monthly payments, all while trying to fit in that 30 year window. Can I negotiate beyond 30 years and have the lender take into account my projected retirement income.

(I know this may sound very risky - in all honesty, my goal is to keep my monthly payments reasonable. If I can, I would most likely refinance the loan as soon as I am able to ensure I don't have any payments while I am actually retired)

[Greg Scott]

Eric:

It is unusual to try to negotiate on home loan.  Usually people just shop around.

If you do find a bank that can provide you a longer amortization, you probably won't like the interest rates.   Why? The 30-year fixed loan that most people get is subsidized by US Gov agencies Freddie and Fannie.   If you get a non-conventional loan, interest rates will almost certainly be higher.