I am curious what you all would do? I just retired as an E-7 with 22 years of service in the Air Force. I did not realize until about 6 months til my retirement date that I could not use my military income to qualify for a loan since I was within 12 months of retirement. At this point I need a job offer to qualify for a loan which I do not have yet. I also have not received a rating from my BDD claim yet so I don’t have any income from disability to count on yet; my official retirement date was 1 Jul.
Great news is that I have enough money to purchase a house in cash. I started saving and investing from my days as a E-1 and have $852K in my Charles Schwab brokerage account, most of which I can access. Only $117K is tied up in a Roth IRA. The rest is in taxable brokerage accounts so I can withdraw from those at any point. I have $655K in my TSP account. I have $37K in my checking account.
Right now I am lucky enough to be able to stay with my family but I think it might be a while before I get a job offer. I would rather finance a house instead of tying up a lot of my capital. The house I am looking at buying is $450K in Nashville, TN. It is new construction. My credit score is 816 but doesn’t do me much good if don’t have an income each month. I can’t count on qualifying with just my retirement pension as that will be around $2900 monthly, which is not enough to qualify for the loan. The advantage to paying cash is I will have no mortgage to worry about and will save a ton of money in interest over the course of a loan.
Would you all wait until you got a job offer to qualify for a loan or just go ahead and pay cash if you could?
Posted by msdontplay01
2 Comments
You can’t use your retirement to qualify for a mortgage? The VA has home loan program as well.
It’s not a bad idea; are you sure it’s where’d truly want to settle down? I’d probably rent first and see if I like the area 100%, then buy.
Think tax implications – what capital gains, short and long term, will you see and what will that do to your AGI for tax brackets? If you’re cashing in a apple or QQQ bought 15+ years ago you’ll owe some money and it may not be worth it.
Have you checked with Schwab about mortgage options with your brokerage as collateral/support in lieu of income?