How does a lender use your IRA balance in the calculation to qualify for a home mortgage when you are retired?
Answers | 2
IRA accounts are also commonly used to satisfy the reserve requirements for a home loan. Conforming loans generally only require 2 months PITI (principal, interest, taxes, insurance.) Jumbo lenders usually want 6 mos and depending on the loan amount and purpose is could be 12 or even 24. If you have other financial accounts that satisfy the reserves, then the IRA income stands on its own. If not, then the UW will first deduct the reserves requirement from the balance, then calculate the attrition based on the remainder.
I hope that answered your question. Good luck!