Mortgage refinancing while unemployed
Hi Ms. Savage.
After almost 34 years of employment, I was laid off in December of last year. I received one year of severance and 10 months of unemployment, which ended this past September. I have approximately $130,000.00 in savings and currently a 1.6 million dollar retirement account, which I won’t begin drawing distributions from till January 2022 when I turn 59 1/2. I have a perfect credit score of 850 and carry no debt other than my 15/year mortgage (refinanced at 3.3785 in 2016) which I pay bi-weekly to pay off faster. I expect the mortgage, which currently is at $85,000.00, to be paid off in less than 8 years. I share all this only to show I’m an excellent risk and in fact, prior to my unemployment, rapidly secured a HELOC for $150,000.00. In light of my current finances, coupled with my unemployment status, what is the likelihood of getting approved for refinancing or am I out of luck because I’m out of work?
Many thanks in advance for your response Ms. Savage!
Tony
Terry Says
OK, I’m so sorry you were laid off — and I do hope that now the world is reopening (fingers crossed) that you can find a job, perhaps in a different industry. There seems to be so much demand for smart people these days.
Two comments. First, you can NOT refi when you are unemployed. But the GOOD NEWS is that there is absolutely no reason to refi, because you already have such a low rate!
Second — NO don’t take the money out of your retirement account. The longer you can keep it growing tax-deferred the better you will be. Just shift at least half to the most conservative investments.
And that HELOC is not an asset — it’s a potential trap! Rates will rise, so try not to use it!
And concentrate all your energy on earning enough so you don’t have to withdraw from your retirement account.
