joetaxpayer wrote:

- quote -

Joe,

You've captured my situation accurately. A good pension that I expect I
will be able to live off of (or will at least cover 90% of my living
expenses) and most retirement savings in illiquid accounts (IRA's and
401(k)).

Thanks for your input.

- quote -

A few points. In the one house I sold, my realtor told us to SELL one
house BEFORE signing contract to purchase another. This required an
apartment in the middle... you make it sound like you have a long
distance move, so I would think you would need a storage facility for a
portion of this move anyway. Sell your current house. Then when time
is right purchase a more desireable house in a more desireable
location.

A few reasons:

1) You no longer want the house you live in now. Houses are NOT liquid
assetts. If there is a willing buyer, find the buyer, get a good deal
and wait for the right deal.
2) If you are in a high price housing district (like Washington DC) and
buying a house in a cheaper area (closer to family), you will have cash
in the bank when looking to close on the retirement house.
3) Timing is everything. If you choose not to sell until you move, the
stress is making the timing work out between the sell, move and
purchase. That is a lot to ask for (making the timing work out). If
you choose to sell, use storage, move and then buy a new house, you
have more control over the discreet things happening, and fewer items
timing is dependant on other items.

rick++ wrote:

- quote -

You may be right, but - OP stated a 'substantial' Federal pension. That
may mean replacing his income 100% had he held the job long enough. Also
mentioned 401 and IRA totaling more than the cost of the new house.
He sounds like a) he'll head into retirement with a good income, but b)
much of his savings is illiquid in 401k and IRAs.

The original question, still unanswered, is how a bank will view his
situation with respect to a new mortgage post-employment. I suspect
they'll qualify him based on the income he receives in the form of the
pension. That seems like a better income stream that most employer paid
jobs, which can be lost. Just my gut instinct on this.
JOE

I dont think you have enough money saved for retirement
if you have tio worry about these modest amounts.
So I recommend not taking early retirement if this is so
much a struggle now.

HW \"Skip\" Weldon wrote:
- quote -

How does it help to accept higher earnest money? Do you think this
brings more motivated buyers? In my (limited) experience selling
property, it seems that the buyer can get their earnest money back for
many reasons which are pure bull, although that gets harder as the deal
progresses.

Just wondering what your thoughts are on this,
-Will

"speednxs" <speednxsticket[at]earthlink.net> wrote
- quote -

As far as the OP's question is concerned, home mortgage
lenders who offer incentives of any kind based on the
contents of a potential client's tax sheltered retirement
plan(s) are in violation of federal law. Legal distributions
from such plans are, as speednxs implies further down in
his/her post, another matter.

Of course, if the OP has a pile of money in a Roth IRA, s/he
should check how much s/he can withdraw without penalty (per
Roth IRA rules) and maybe weigh using this for her/his home
purchase. S/he should bear in mind the loss of the tax free
growth, among other things, of any withdrawal so made. The
best financial planners discourage such withdrawals, IMO,
for the security of the client's retirement.

Lastly, one may take a "bridge loan" from one's IRA. It must
be paid back within 60 days, IIRC. I think for many this is
a great and safe way of juggling money between accounts at
times, as long as the intent is for the dust to settle, with
minimal loss, in that 60 days.

- quote -

now and sell later you lose the difference in price. If house prices
rise and you rent now and buy later you lose the difference in price.
The opposite situations you win. Life if risk, go with the
percentages. Doing a double move with a rental is a big hassle.

- quote -

and to close it early. My HELOC was $0 to open, but $500 to close
early (less than 3 years). I ended up paying that fee when I closed it
without using it when I sold the house. Your HELOC gets paid off when
you sell your house. This isn't a total ripoff, house appraisals can
cost a couple hundred of bucks and the lender had to do this to give me
my HELOC. You may only be borrowing for 3 months, so carefully look at
fees to determine the real cost of borrowing.

It is good to be able to put down 20% of the purchase price. This
avoid Private Mortgage Insurance (PMI) which is very expensive
insurance for the benefit of the lender. If you are retired and can't
easily earn a higher rate than the cost of your mortgage, paying off a
bunch of your house may be a good thing. You may be in a low income
tax bracket in retirement. Just make sure you have enough income to do
this, without relying on savings.

- quote -

collateral.

ERISA (IRA and 401Ks) often cannot be attached by a judgement (except
by the Federal Government of course). There are ins and outs here, so
you have to know your state laws and the "articles of incorporation"
for the instrument. The money IS fair game once you distribute it
(take it out). How close to 59 1/2 your are and able to take
distributions is an important factor. You want to take many small
yearly amounts rather than a few big chunks to keep yourself in a low
tax bracket.

Enjoy your new house and retirement!

On Sun, 8 Oct 2006 05:49:14 -0500, "Elle"
<honda.lioness[at]nospam.earthlink.net> wrote:

- quote -

I agree with Elle. In fact, I would go further and suggest that there
are other real estate strategies that used to be "somewhat aggressive"
and which are now "substantially aggressive". (My opinion.)

Included in this category are accepting a contingent sale offer and
taking one's home off the market while someone else tries to sell
their house; accepting offers with only modest earnest money deposits;
and providing mortgages for the buyer where there is not a substantial
down payment. (Regarding taking back notes, I would insist on a
variable rate mortgage.)

In fact, I am asking clients to forego looking for new homes before
closing (actually getting the cash) on their old home. The likelihood
is that they will find the house-to-die-for quickly and place great
pressure on themselves to accept offers on the current home that they
would not normally entertain.


-HW "Skip" Weldon
Columbia, SC

Too risky. You do not want to feel pressured into accepting
an offer on your current home because you already have
purchased another home. Instead, when the time comes, sell
your home, then rent in the area where you want to live.
Meanwhile, use tools like www.realtor.com to get an idea of
what the housing market in your new location is doing.

I expect to be offered early retirement within the next 6 months or so
and, should it come to pass, I plan to relocate closer to family. My
idea is to not rush into buying just any home, but to wait until I find
the "right" home for me in my retirement. Consequently, I expect that I
would not put my existing home on the market until I find the specific
home that I will purchase.

Because of this, it's conceivable that I might have to carry two
mortgages for a few months before I'm able to sell my existing home.
Assuming that scenario, would it be smart for me to open a Home Equity
Line of Credit to provide most of the downpayment on the new home? I
have approx $100K equity in my existing home and would like to put at
least that amount down on any new home that I purchase. (I could add
approx $40K to the downpayment out of savings, if need be). I would pay
off the HELOC with my equity as soon as I close on my existing home sale.

I have never taken out a Home Equity Loan or a HELOC, but have received
many offers to do so. So, I have a few questions:

1. Would the scenario I describe be a good way to carry me over between
buying the new place and selling my existing home?
2. It's my understanding that a HELOC is merely a set amount of $$$
that's available for my use and I don't make any payments on it until I
actually use it. Is that correct?
3. In retirement, I will be receiving a substantial federal pension,
and don't plan to work another job. I have more $$$ in my 401(k) and
various IRA's than what the new house would cost. How will this affect
my ability to get a mortgage on the new house?

Thanks!