| Posted by: Jflynn64 Jan 13 2003, 07:32 PM |
| Does anyone know if its possible to use IRA accounts as collateral for mortgage loans? |
| Posted by: loanuniverse Jan 14 2003, 09:29 AM |
I do not see how you could use the money in an IRA as collateral. How could the financial institution secure its interest on the account? It occurred to me that maybe you could borrow against the IRA. Nevertheless, I have to say that I am completely unfamiliar with borrowing from an IRA. Therefore, I did a search in the internet and found this article in bankrate.com and this article here that talk about borrowing from an IRA. Unfortunately, it seems like borrowing is limited to 60 days and the money needs to be replaced to avoid penalties.
I don't think you can use the IRA as collateral and it doesn't seem possible to borrow from it for longer than 60 days |
| Posted by: KAM Dec 30 2003, 11:45 AM |
First, the information that you can't use an IRA as "collateral" is incorrect. Many companies, via their credit unions, offer just that. You actually win because you end up paying yourself the interest. No money actually leaves the account, so, you are NOT subject to taxes, penalties, etc. UNLESS you don't pay the loan according to the rules....
The caveats are that, in most cases, the credit unions or financial institutions must also hold the IRA account as well. And, the default/bad payment penalties are usually substantial, since they include the taxes, etc.
Just thought you all would want to know. For more details, you can contact Addison Avenue Federal Credit Union or other financial groups to get the details. |
| Posted by: loanuniverse Dec 30 2003, 06:12 PM |
KAM:
Thanks for the contribution, and believe me I am not involved in retirement planning at all in my professional life. However, I think the original poster was talking about using the IRA as collateral for a "mortgage loan".
In addition, when you say "companies"..... would you be referring to a 401k instead of an IRA? Although, I have to admit that I would be the last person to open an IRA in a bank or credit union. I might work at a bank, but I like the flexibility in managing my retirement money that a brokerage house provides.
Thanks again for the contribution. |
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