Mortgage underwriting rules eased for seniors with assets

The revision allows lenders to use untapped retirement account balances in computing debt-to-income ratios to help seniors qualify for a mortgage.

By Kenneth R. HarneyMay 24, 2013, 7:57 p.m.

WASHINGTON — Here’s a heads-up for the growing ranks of seniors whose post-retirement monthly incomes aren’t sufficient to qualify for a mortgage under today’s tough underwriting standards: Thanks to a rule change by the largest players in the home loan business, you may be able to use imputed income from your 401(k), IRA and other retirement assets to qualify for the loan you want.

That, in turn, could open the door to a money-saving refinancing to a lower-rate loan or a downsizing purchase of a new house or condo.

Top credit officials at Freddie Mac, the giant federally controlled mortgage investment company, said recently that a little-known policy revision now allows seniors and others to use certain retirement account balances to supplement their incomes for underwriting purposes without actually tapping those balances or drawing down cash.

 

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