HELOC for retirees: qualifying with your assets
A large portfolio and a modest pension is a qualifying problem, not a capacity problem.
Yes — on the line we place, assets can support qualifying when income alone falls short. If your debt-to-income ratio is over 50%, savings and investment accounts can be used in the application. Provide the account details promptly: an application waiting on them expires after 14 days.
How assets help
A retired couple with a paid-off home, a substantial portfolio and modest Social Security and pension income can look stretched on income alone. When the ratio comes in over the limit, the application moves to an asset step where your accounts can support qualifying.
How retirement income is verified
- Award letters for Social Security, VA benefits, pensions and annuities can be uploaded for review. Use your most recent letter. Manual review adds time.
- Tax returns can be linked electronically from your tax-preparation service or IRS.gov account.
- Savings, retirement and investment accounts, such as a 401(k), IRA, Roth IRA, brokerage, money market or CD account, can be linked to support qualifying. If you’re under 59½, only a portion of a retirement account balance counts.
In California, a spouse’s income can be included. Printed statements aren’t accepted.
If you already have a reverse mortgage
Homes with an outstanding reverse mortgage aren’t eligible for a HELOC. If you’re weighing the two, decide before taking the reverse mortgage. They can’t sit on the same home.
The standard rules still apply
- Credit score of 640 or higher. See credit score.
- A home owned free and clear can have a HELOC in first position.
- An eligible property type, with no more than 2 existing liens.
- A Social Security number.
Common reasons retirees draw on equity
Aging-in-place changes like curbless showers and single-level living, helping children with a down payment, paying off a car or cards to free up monthly income, and covering large one-time costs without selling investments at a bad moment.
Tell us how you’re paid
We’ll tell you whether it verifies, and what else can help you qualify.
Retired and Asset-Based Qualifying: questions
Yes, if your income verifies and you meet the other requirements. Retirement income such as Social Security or a pension can be verified, and if your debt-to-income ratio is too high, the application can move to a step where assets may help you qualify.
Yes. Upload your most recent award letter for review, or link your tax returns. Award letters are reviewed manually, which adds time.
No. Homes with an outstanding reverse mortgage aren’t eligible.
Promptly. An application waiting on asset information expires after 14 days.
These are the requirements for the home equity line we place. Other lenders set their own guidelines, and some are more flexible.