Zillow Advice: Mortgage - How does unemployment matter for refinance?

with $3M savings, it is silly ...

Sat, 10 Jan 2009 02:36:00 GMT

with $3M savings, it is silly to try to get a loan.....

Just pay it off!!!!!

You will save plenty of interest $$$$$ (>$25,000) per year. This is now your salary instead.

Hope this is helpful

Ben, great rates. Just as ...

Fri, 09 Jan 2009 22:06:00 GMT

Ben, great rates. Just as if you were employed.

With most investments doing ...

Fri, 09 Jan 2009 09:22:00 GMT

With most investments doing as poorly as they are, and with no taxable income, I really don't see why one wouldn't want to use savings to pay off the loan; that is a "return" of at least 3.88%, annual and no loan initiation fees...

But if it is pre-tax dollar retirement funds; that may be a different issue. But you can borrow on your own funds, financing your own loan, and continuing to make payments, or you can use your own funds as "collateral" for someone else to finance you, or as suggested, your adjustable rate is still a good rate, so why give it up? If you don't have the income to make the payments, you could always draw on the savings to make the payments.

Personally, if it is not retirement funds and not in an account bearing over 4% annual interest, I would just pay off the loan. And if it is a retirement account with pre-tax dollars, I would just keep the loan I had.

And if you are close to retirement age, I would just retire early, but not start drawing on Social Security until after 70. Then maybe start another business on the side.

Have you considered paying ...

Fri, 09 Jan 2009 08:47:00 GMT

Have you considered paying it off from your savings to solve your misery? You can only demonstrate a 40K income. Banks are not unlikely to risk this kind of A/P for a 520K. May be you can negotiate a hardship which will quickly lower your 820 FICO score to something you don't want to accept.

Many retirees have solid pension and other incomes. They have no problem getting a small mortgage.

In high tech industry with as many years of experience as you have, I tend to think Silicon Valley use less (<25 years) experienced employees for lower pay. There used to a saying for every $10K one wants it would take a month to find that job. This is not the blog for career counseling. You need to have some professional help you to assess how marketable you . Is interest or tax write off important if you have no income? Good luck to you.

bengtc, the 1 yr libor is ...

Fri, 09 Jan 2009 03:51:00 GMT

bengtc, the 1 yr libor is just over 2.00. It has not been below 2 since 2004. Still, with your margin of 2.25 that = 4.25%. You mentioned it converts to a fixed in 3 months. It does not convert to a fixed, it converts to a 1 year arm so when it does convert, the 1 year libor will have probably moved down a little more maybe giving you a 4% rate. That rate is only fixed for 1 year, until the next adjustment 1 year later. If you plan on staying in this home more than 2 years, I would look into a lender that will underwrite your file using some of your most liquid assets.

Greg, start your own thread. ...

Thu, 08 Jan 2009 19:41:00 GMT

Greg, start your own thread. This one is for Ben. .... Thank you!

What do retired people do ...

Thu, 08 Jan 2009 18:27:00 GMT

What do retired people do for loans? I got a mortgage with no job, a solid FICO of 820, no debt, and investments that would cover the entire loan if needed. I got an excellent rate for a fixed, 15 year mortgage at 5.3%. This was 11 months ago.

Jamie,Just double-checked ...

Thu, 08 Jan 2009 18:15:00 GMT

Jamie,

Just double-checked ; I'm on Libor and my bump is 2.25%, not 3% as I thought.
So with 1.23+2.25 = 3.48%, not bad....
I'll hang onto my adjustable.

Barring the uncertainty of skyrocketing interest triggered by a dollar collapse. But that's another story.

Ben, Relax, look at your ...

Thu, 08 Jan 2009 06:05:00 GMT

Ben, Relax, look at your note.

3% would be the margin. 3% was extremely high and you will see a huge premium paid by you at for the origination on the settlement statement. That is water under the bridge. Live and learn. Normal rates where 1.50 -2.25%.

Having said that, Jumbos where mostly Libor based, if lucky T.bill based. One year libor is about 1.23 and T,Bill about .87. So your BUMP would be 3% plus 1.23 or about 4.25% on your adjustable.

Hold on to that. Adjustable loans are as good as gold. No one can get one these days. I have clients calling me and shocked at their 3.125 0 3.25% current rates. Odds they will go lower.

On your you are probably floored at your start rate. I made most at 1% so they could go lower. Most adjustable notes have a floor at their start rate.

Be happy and hold on to that mortgage. : )

3.875% is pretty good.

I have a lender that does ...

Thu, 08 Jan 2009 04:40:00 GMT

I have a lender that does what Rudi is describing but they do not lend out of the southeast. They use a very liquid asset like CD's, divide the asset by 36 months and that becomes their income, a self paying annuity. Then he still has a ton of reserves, killer credit, low ltv, DONE.

bengtc, start with your current lender and ask for it, based on your assets.