To Make a Non-Contingent Offer: Let’s say you have a house to sell and you’ll net $100,000, and one to buy for $500,000. Your agent expects a contingent offer won’t be accepted. In that case we could help you with a bridge loan on your current home for the down payment on the new house. Then we secure the financing for the new home. When you sell your house, the bridge loan gets paid off. After you’ve made three payments, for a nominal $450 fee, you can put the $100,000 towards the new loan and recast it to a lower balance. Your payment adjusts down, PMI can be removed, and you end up with the loan amount you wanted all along, without refinancing or making your offer contingent on your sale.

To Avoid Liquidating Assets: For buyers of a certain age, an “asset depletion” loan can let them keep their money in the market. If a borrower is 62 or older, any security that can be documented as in their name can be used as qualifying income—IRA, stocks, cash, etc. Your loan officer will help with the calculation, but let’s say you have $1million in an IRA, and you receive Social Security and pension. If the Social Security and pension don’t provide enough income to qualify, you can take $1,000,000 divided by 240, and use $4167 as qualifying income. You don’t have to touch the investment account or sell anything, but owning it gives you more latitude for your purchase.

To Help Your Adult Child Get a Home: Lots of Baby Boomers want to help their young adult children get a home in this challenging environment—without draining the bank. Cosigning with your child as a non-occupant borrower has a couple advantages. For one, the home will be classified as a primary residence—so your rate and the down payment requirements won’t be higher the way they would on an investment property loan. Of course, your income can make your child eligible for a lot more house. Having the mortgage paid on time is only going to strengthen the child’s credit profile, and of course the equity they’re building will help them in the future. We’ve worked with many parents in this situation and the child gets roommates who cover the whole mortgage in rent payments—a win-win situation.

McGowin King Mortgage has been helping Birmingham’s home buyers since 1998. You can reach Warner McGowin at warner@mcgowinking.com, or 205-422-9596. For more information or to apply online, click here.