A lot of people have lost their jobs or source of income during the pandemic. If you are a homeowner, you can use your home equity to access some cash; but is that possible with no income? Can an application get approved?
Is It Possible to Get A Home Equity Loan with No Income?
The quick answer is yes. You can definitely get a home equity loan with no income. How so? Lenders evaluate home equity loan applications based on the value of the property being used as collateral for the loan. Because of this, income is not a big factor if someone will get approval or not. This is one of the reasons why a home equity loan is popular for self-employed homeowners and retirees who need to borrow some money.
But what makes a home equity loan different from other loans with strict requirements? Home equity loans are secured loans. Lenders know that if the borrower fails to pay the loan, they will still get repaid with the home. This is the reason why lenders for home equity loans are more relaxed and charge lower interest rates. They know that there is less risk of default compared to non-secured loans.
Get A Home Equity Loan with No Income Verification Needed
Because income is not a huge factor when applying for a home equity loan, no income verification is needed. You can simply state your income when asked by the lender or write it in your application form. This is also the case for ‘stated income home equity loan’. It simply means that no income verification is necessary and that your word is taken as is. You do not have to worry if you have irregular income or have no income. If you are unemployed, someone who earns on commission, a freelancer, or someone who has multiple jobs and side gigs, it doesn’t matter to the lender.
Benefits of Getting A Home Equity Loan if You Have No Income
Most people may think that a loan is a bad idea for someone with no income and that is true in most cases. A home equity loan is different though. For one, it allows a homeowner to use their home equity without having to sell the home. As long as the homeowner is paying the loan and adding to the equity, any value is added to the homeowner’s wealth and not vanishing into thin air. Another benefit is that it allows a homeowner to borrow a larger loan amount, up to several hundred thousand dollars or perhaps millions based on the value of the home equity. As a secured loan, it also enjoys lower interest rates and often flexible payment terms. These benefits are on top of a relatively easy application and approval process.
Whether you have no income now in between jobs or projects, you can apply for a home equity loan at Homebase Mortgages. Our offices are open and approving applications within 24 hours or 1 business day. Contact us today if you have any questions!