Planning to retire in about 1 yr. Currently own our home outright with a current value of $450,000. Other assets total about $1,900,00. No debt. Are there any issues in obtaining a mortgage for a retirement home in sun country USA now that I no longer have an income.

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    Is that a missing 0 or misplaced commas?
    – Hart CO
    May 17, 2017 at 2:36
  • Do you plan to keep your current house? How much house are you looking to purchase? What are you living on if you have "no income"? These are some of the questions that will determine your ability to pay a mortgage.
    – D Stanley
    May 17, 2017 at 13:18

1 Answer 1


With no income, your assets can be used to qualify you for a mortgage.

Fannie Mae/Freddie Mac would use your assets to calculate a monthly income using this formula:

((qualifying assets * 0.7) - closing costs)/360

Qualifying assets would be pretty much all of your liquid assets that aren't subject to withdrawal penalty and are related to employment savings, but they vary by lender.

Closing costs aren't always subtracted.

So if you have $1,900,000 in qualifying assets, they'd consider your monthly income $3,694 for mortgage qualifying purposes (if no closing costs deducted).

Lenders that don't work with Fannie or Freddie can do this calculation differently. Here's a good article with a more detailed list of which assets can be considered: Use your Nest Egg as Qualified Income for a Mortgage

I doubt you'll have issue getting a mortgage, but you might qualify for less than you expected due to their calculation.

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    Adding on to that last sentence, most lenders' approvals tend to top out at a principal that would give you a total payment about 30% of monthly gross income. So, that's a mortgage payment roughly in the $1200/mo range. Working backward to a principal amount will depend on loan term and any required escrow payments including property taxes. I'll tell you that $1200 is about my monthly payment on $135k principal for 30 years (including PMI and Texas property taxes). Adding in $450k worth of home you own outright as a down payment, I see no reason you couldn't qualify for a $550k house.
    – KeithS
    May 17, 2017 at 16:43
  • @KeithS Do you have a pretty hefty interest rate, or are property taxes really high in Texas? One of my mortgages is $150k and monthly is $900 (no PMI but property taxes paid through escrow).
    – Hart CO
    May 17, 2017 at 16:48
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    Our rate is 4.75% which was neither stellar nor terrible for the market in 2011. Property tax rates are fairly high in Texas (46th out of 51 U.S. jurisdictions) because there's no income tax here, so property and sales taxes are the State's bread and butter. That payment also includes monthly contributions to about a $1600 insurance policy, plus about $100/mo PMI for the FHA loan.
    – KeithS
    May 17, 2017 at 16:53
  • As a fellow Texan - I think property taxes are pretty high. My $250k home was appraised by the tax assessor with a $6000 bill for 2017, up almost $500 from 2016. But it's offset by not having income taxes. I think Uncle Sam gets his cut either way.. Just which piece of the pie he cuts. May 17, 2017 at 16:54
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    Yes we are straying a bit. I have looked into it, we got the mortgage before the rules changed (if you get an FHA loan now you pay PMI for the life of the loan), but even with our loan the "20% rule" is based on outstanding vs original principal, so the fact our home appreciated about $80k since 2011 didn't help us. We need to upsize anyway (family of 5 in 1580sqft), so now the appreciated value is better than 20% down for a conventional mortgage on about double the house.
    – KeithS
    May 17, 2017 at 17:22

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