Can you borrow money if you are retired? — RISMedia
After you retire, your circumstances may change, for better or for worse. There are several ways to borrow money when you are no longer working.
Take out a mortgage
You may decide to move to be closer to your loved ones. When you apply for a home loan, a lender will look at your income, which may include investments, social security payments, income from rental properties, and other sources. A lender will also consider your debt ratio.
If you want to buy a home, it can be difficult, but not impossible, to qualify for a mortgage. A lender will be more interested in your ability to repay the loan than the amount of money you receive each month.
Use home equity
If you already own a home, you can tap into your equity and get funds that you can use for various purposes. You can take out a home equity loan and receive a lump sum that you repay each month at a fixed interest rate, or you can obtain a home equity line of credit, use the funds as needed and repay them at a fixed interest rate. variable interest. .
Another option is a cash refinance. You can refinance your existing mortgage for more than you currently owe and get the difference in cash. Get quotes for a home equity loan and cash refinance from multiple lenders and compare interest rates and other terms.
You may want to consider taking out a reverse mortgage so that you can borrow against the equity in your home and receive funds in a lump sum or monthly installments. The loan will not have to be repaid until you move or die. Before taking out a reverse mortgage, do your research and get professional advice to avoid predatory lending.
If you have credit card bills and other forms of debt, you may want to consider a debt consolidation loan. You can make a single monthly payment rather than several and repay your debts over a longer period.
To buy a car
If you need a new vehicle after you retire, it may be relatively easy for you to qualify for a car loan since the vehicle will be used as collateral. Just make sure the monthly payments won’t strain your budget.
Take out a personal loan
If you need money to cover an unexpected expense, you may want to take out a personal loan. A secured loan will be backed by collateral, such as your home. If you don’t repay the loan, the lender can seize your property. An unsecured loan won’t put your assets at risk, but it will likely have a higher interest rate.
Protect your investments
Borrowing money from a retirement account is another option, but you should generally avoid it if possible. You don’t know what the future holds and you don’t want to deplete your savings and be unable to make ends meet.