- This was posted on January 31, 2009

In the last post I spoke about our experience in the current real estate market and how we had found a house that we simply loved. Scrambling to make an offer, we quickly got our house on the market. We thought that would be the toughest part of the process – to get our house sold in time to close on the other house; but it turned out that it was the least of our concerns. As our mortgage broker explained, the fact that I was self employed would be a problem in terms of our application and, in fact, he was recommending that my husband apply for the mortgage loan on his own as his credit was excellent and he had been employed with the same company for some time.

The only issue was that we had to somehow decrease our debt to income ratio in order for him to be approved for a mortgage on one salary; and to do that we needed to pay off our credit cards and even our car loans. In order to come up with the lump sum of cash that we needed to pull this off we decided to sell annuity payments from the money we had been receiving monthly from a structured settlement arrangement. I had received money from a personal injury case and the money was put into an annuity, after which I began to receive payments month to month. I thought that was the extent of it; but it turns out that you can sell annuity payments – as many as you need to sell – in order to accrue a lump sum of cash like what we needed.

I worked with a great buyer of structured settlement annuity that helped me determine the exact number of payments that I needed to sell in order to come up with the amount we needed to pay all of our debt. In the end, I sold that exact number of payments, the ownership of which go to the buyer after which payments following that revert back to me.

We were able to pay everything off, reduce our debt to income ratio, and get approved for a mortgage loan. We move into our new home – our dream home – next month and we couldn’t be happier.

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