5 ms·

I tried to get a $500k mortgage a year ago. I had recently formed a new bootstrapped startup and wasn't taking a salary for myself, so I had no income. However

I tried to get a $500k mortgage a year ago. I had recently formed a new bootstrapped startup and wasn't taking a salary for myself, so I had no income. However I had 800+ credit score and a few million in liquid assets (not even crypto, just boring index funds) and could not get a mortgage whatsoever despite trying through multiple lenders. One even asked if anyone would be willing to cosign and suggested my parents. Ended up just paying cash.

HonestOp001 4y ago
This is an important thing to note how rote the loans are. If you deviate from what “the system” asks of you, trouble ahead. The best recommendation here is to get chummy with a credit union leader, then you can find ways to break outside of this issue.
- anm89 4y ago
  Yeah, I've learned this the hard way. Very true
deleted 4y ago
[deleted]
wmf 4y ago
I was in a similar situation and I got an investment line of credit instead of a mortgage.
ericmay 4y ago
Consolidate assets with a broker and then take out a pledged asset line loan is one way.
tluyben2 4y ago
Yes, I had a very similar situation to you; startup (I took a salary though as we were profitable from day 1) and assets enough (nothing to do with crypto). Banks don't like any risk or differentiation of process; it is just easier to just say no. Even if you have the cash to pay for the house (which I did in my case); you can pay for the house in cash but the banks still, in some situations (like having a startup) they won't give you a mortgage (in my case, I knew I could get a far better interest rate for my money than the interest rate of taking a mortgage, so I didn't want to put my money in).
- notch656a 4y ago
  Isn't it a good thing that persons such as yourself can't take advantage of government-subsidized interest rate arbitrage? Obviously no one should get these artificially low interest rates subsidized government, but I don't see a compelling reason why someone rich enough to a house outright should be afforded the opportunity to arbitrage interest rates via exploitive government policies.
chubbyFIREthrwy 4y ago
Same situation myself[0] except credit score 775, and I could get a mortgage, but, no matter what % the down payment, the interest rate wouldn't be below 5%, at a time when conventionals that were Fannie-flippable were getting under 3. (This situation exists because Fannie buys without consideration for long-term interest rates or the impact of a higher down payment after some threshold.) [0] https://news.ycombinator.com/item?id=31220794 https://news.ycombinator.com/item?id=31220794

HonestOp001 4y ago

This is an important thing to note how rote the loans are. If you deviate from what “the system” asks of you, trouble ahead. The best recommendation here is to get chummy with a credit union leader, then you can find ways to break outside of this issue.

anm89 4y ago
Yeah, I've learned this the hard way. Very true

deleted 4y ago

[deleted]

wmf 4y ago

I was in a similar situation and I got an investment line of credit instead of a mortgage.

ericmay 4y ago

Consolidate assets with a broker and then take out a pledged asset line loan is one way.

tluyben2 4y ago

Yes, I had a very similar situation to you; startup (I took a salary though as we were profitable from day 1) and assets enough (nothing to do with crypto). Banks don't like any risk or differentiation of process; it is just easier to just say no. Even if you have the cash to pay for the house (which I did in my case); you can pay for the house in cash but the banks still, in some situations (like having a startup) they won't give you a mortgage (in my case, I knew I could get a far better interest rate for my money than the interest rate of taking a mortgage, so I didn't want to put my money in).

notch656a 4y ago
Isn't it a good thing that persons such as yourself can't take advantage of government-subsidized interest rate arbitrage? Obviously no one should get these artificially low interest rates subsidized government, but I don't see a compelling reason why someone rich enough to a house outright should be afforded the opportunity to arbitrage interest rates via exploitive government policies.

chubbyFIREthrwy 4y ago

Same situation myself[0] except credit score 775, and I could get a mortgage, but, no matter what % the down payment, the interest rate wouldn't be below 5%, at a time when conventionals that were Fannie-flippable were getting under 3. (This situation exists because Fannie buys without consideration for long-term interest rates or the impact of a higher down payment after some threshold.) [0] https://news.ycombinator.com/item?id=31220794 https://news.ycombinator.com/item?id=31220794