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IRA as collateral?

As far as I know I have no credit history.  I worked though school without taking out student loans and I've never rented in my name. I am finishing my senior year in college and I haven't held a job in almost a year now.  I inherited a small 50K IRA and also 1/4 of a house (with my 3 siblings).  I'd like to get a house for around 50K but don't want to cash out my IRA.  Is it possible to get a morgage loan w/out a job or credit history in my situation?  Can I use my IRA as collateral?  Will it help me at all to get a loan or should I give up on this idea and just rent?  I also have 10k in my own savings for a down payment.
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October 14 2013 - US
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Answers (4)

HarperLimney,

You cannot use your IRA as collateral for a loan but, you can get a loan just using assets as income. However, you would need to be over 55 and have a large amount of assets. 

The best case scenario is for you to get a job and then you will be able to qualify based on that income. You would want to discuss what you qualify for with a loan officer as soon as you have the job offer. 
 With your downpayment, a job, and the IRA as cash reserves, you would be able to qualify for a home mortgage with a limited credit history. 

All The Best! 
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October 15 2013
You must have a job in order to obtain a mortgage, so work on landing one as soon as you graduate. Also, you should obtain a low limit credit card or two so that you can build a credit score. Charge a little, pay it off, charge a little, pay it off. Over a period of several months you will begin to build a score. Always pay on time!
Regarding the IRA, it's not likely that you will be able to do anything but withdraw the funds if you must use them. The IRS does not allow loans against these type of accounts. Refer to this IRS link for information on retirement plans http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Loans
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October 15 2013
You should be able to use the IRA as collateral because it is real property. Not many people know you can use life insurance and retirement plans as collateral, but you can!!!
I would speak to a QUALIFIED lender AND Realtor because your situation is unique. 

If you cannot buy a home in the position you are in now; if I were you, and I'm not, I would not cash out my IRA, or liquidate my 1/4 stake in the house. If you do not want the house, have your siblings buy you out. Build your credit and continue to save and purchase a house at a later date. You can get a credit card and pay it off monthly to start building credit (but make sure you pay it off every month!!!)
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October 14 2013
Well, your credit should be decent given no debt to speak of combined with your assets (some liquid ready cash conversion i.e. IRA minus penalty and 10k for down)-and you should be able to get an FHA loan or Fannie Mae Home Path financing with as little as 3% down.
Find a lender in your area(your own bank will do as a start) and see what you qualify for.
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October 14 2013
 
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