[74-911]

I personally went through a very similar situation a couple of months ago. I made a significant down payment from the proceeds of the sale of our previous house and applied for a 6 figure mortgage for the balance on the new house rather than pull the funds from qualified accounts (IRAs).

To me it was a no-brainer. 2.5% on a 15 year note, deductible interest, my returns on the money in the qualified accounts are well above 2.5%, are accumulating tax free and most importantly, I have the cash available immediately if I need it, not tied up in a house. To withdraw from the qualified accounts would also cause a significant income tax hit. It doesn't always make sense to pay off your house just because you are retired or retiring - it depends on your individual situation and you need to put a sharp pencil to it.

I assumed that qualifying for the mortgage would be a piece of cake... credit score well above 800, large down payment, etc. etc and As the man in the article found out, mortgage companies want to see income these days, not assets. They want to see absolute proof of all sources of income. I lost count of the number of pages of financial documents I furnished them. When the loan officer first asked me what our income was I replied "it is whatever I need it to be" and not really being facetious about it. She kind of laughed and said more or less " that was then, this is now" and HUD has cracked down big time on mortgage lending.

This was the fourth mortgage plus several refinancings over the past 40 or so years and by far required the most documentation of income, assets, debts, etc. and there was absolutely no "we'll take your word for it" on any of it.