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How Do I Apply for a Loan in Retirement?

Question: “I just retired: When I apply for a home loan, how much monthly salary should I put on my loan request form?”

Answer:  For retirees who draw income from investments and other sources, it’s not as simple as a single “monthly salary” number on a mortgage application. But start with your Social Security payments in the box that asks for your income, says Roger Wohlner, a CFP at Arlington Heights, IL-based Asset Strategy Consultants.  Other types of income you’ll have to list separately. Many mortgage loan applications have a place to record “dividends/interest,” which is where you would include payouts from your nest egg, and a spot for “other income,” which would anything else that earns you money (i.e. a rental property).

But your lender should be able to guide you through all of this, so ask for help before you fill out the form.  In preparation, pull documentation of your retirement accounts, brokerage and bank accounts, Social Security payments, loans and any other sources of income, assets and debts. The days of “no-documentation” loans are over, Wohlner says: “You’re going to need to be able to substantiate all of it.”

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