Seniors who have equity, income and a strong credit score can borrow against their home with a home equity loan or home equity line of credit, or HELOC. A loan is for a specific amount over a stated term, while a HELOC has more flexibility. In either case, the borrower must make payments on the loan or line of credit.
Qualifying for a home equity loan or HELOC doesn't require a paycheck or employment-related income, according to Gary Korotzer, senior vice president of marketing at Wells Fargo in San Francisco. Instead, seniors can use their investment income, rents from rental properties or other sources to qualify.
"It's going to be situational," Korotzer says, "depending on how much they (want to borrow) and their ability to repay. Many people have multiple sources of income."