Question: I am panicked! My client retired in July and now her lender, a major bank, declined her loan because she has no job.  But she has nearly $500,000 in her retirement fund.  Is there anything we can do to qualify her for a home loan?

Answer: There are many types of earnings other than the A majority of individuals usually retire in their 60’s.  Anyone over the age of 62 and a half is eligible for social security.

Child Support and Alimony can be used as income, as long as the client has been receiving it for three months and will continue to receive it for at least three years.  They will need a court order for child support and a divorce decree or a filed separation agreement for the alimony. Although many of us continue to support our kids, way past their 18th birthday, most child support agreements only go to age 18.  Therefore, if the child is 16, it will be kicked out.

Taking money from your loser husband’s joint bank account who you are considering divorcing  will not count.

A monthly allowance from Mummy and Daddy does not qualify for income. Sorry.

Social Security for disability is allowed but can be sticky because a letter is required from the doctor stating the disability will last for at least three more years.  If you bashed your head on your computer while cruising face book and as a result of the unfortunate

mishap, receive short term disability: you will have to go back to work to qualify.

And unfortunately if you were laid off from your job, unemployment insurance is not a viable source for monthly wages.  Exception: if your borrower works construction in Duluth, Minnesota for the past 20 years and he receives unemployment every December and January due to weather, it may be considered.

If your client is lucky enough to retire at an early age, she could start taking monthly withdrawals from her retirement account with the same amount deposited into her checking account every month.  As long as it is tracked and paper trailed she could meet underwriting criteria for qualification.

Ask your client to check with other lenders.  Her current bank’s loan officer may not have studied the loan officer hand book and may not be aware of the many other alternatives for income.

Diane Gerdes