If you are buying property or doing a refinance, the lender needs proof that you have enough income to make the payments. How much savings you have is irrelevant. Can you just do a monthly withdrawal from your savings and call it income? No. But the goofy thing is, you can do the same thing from your IRA and it is considered income.
Think about that for a minute. You have two accounts at your broker. You take money from one of the accounts, it’s not income. You take money from the other account, it is.
So you start doing withdrawals from your IRA to show income and the lender signs off. Then as soon as you get the mortgage, you can stop taking that ‘income’. So it’s all a sham. But the rules are the rules. This is something I’ve helped many of my clients do over the years.
It’s something to keep in mind. If you’re retired and don’t think you can show enough income for that mortgage, you very possibly can, using this goofy method.