A New And Intriguing No Income Home Equity Loan Is Now Available; Here’s How It Works

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Homeowners across America are tapping into their home equity using this new and little-known no income home equity loan. But is it legitimate? We’ll cover how it works and a few things to watch out for.

If you’re reading this, you probably already know how tough it is to find a no income home equity loan or HELOC without income verification (also called a no doc home equity loan).

Most home equity loans are written by local banks, credit unions, or big national banks. If you have no income, limited income, or can’t prove your income, it’s all but impossible to get a home equity loan from a regular bank.

Now, here’s the good news: a regular bank is not your only option. The world has advanced and new options are available. Yes, a no income home equity loan exists, but you have to know where to find it.

It’s typically very difficult (or impossible) to get a home equity loan without a job or if you can’t prove your income. A home equity agreement is a good alternative option for those who can’t qualify for a HELOC or home equity loan from a traditional bank or credit union.

The No Income Home Equity Loan

Many homeowners are taking advantage of a new no income home equity loan called a home equity agreement, or HEA.

A home equity agreement is not like a regular loan. It offers a large lump sum payout with no monthly payments and zero interest charges in exchange for a percentage of your home’s future value.

This means you can convert a large chunk of home equity into cash without adding a big payment to your monthly budget. This is a nice advantage if your expenses are already tight.

Because there are no monthly payments, there are no income requirements for most applicants. It’s even possible to qualify for this type of home equity loan without a job. Here’s how it works:

  • No Payments and Zero Interest Charges

Unlike a home equity loan from a regular bank, there are no burdensome monthly payments or interest charges to worry about.

  • You Remain the Owner of Your Home

You remain the owner, which means you’ll continue to pay property taxes, homeowner’s insurance, and any existing mortgage payments and HOA dues (if applicable).

  • You Don’t Need Perfect Credit

You can still qualify even if you have less than perfect credit. The minimum required credit scores are usually around 500.

  • No Income Verification

There is no income verification if your credit score is at least 550. Qualify with no income, low income, or if you’re self-employed and can’t prove your income.

  • Flexible Payout Amounts

Get a lump sum payout of $30,000 to $500,000, depending on your financial goals and how much equity you have in your home.

  • Flexible Occupancy Requirements

Owner-occupied homes, second homes, and investment properties are eligible.

Again, it’s possible to get up to $500,000 with no monthly payments and no interest charges even if you have less than perfect credit.

In exchange for a lump sum payout, you agree to repay the investor a percentage of the value of your home at a future date, such as when you sell the home, the last borrower passes away, or the contract term ends.

If you’re unemployed, on a fixed income, or otherwise can’t prove your income (such as if you’re self-employed), this kind of no income home equity loan could be an option worth exploring. If you’d like to find out how much you can get, click the link below.

How Homeowners Use The Cash

You’re free to use the cash for pretty much whatever you like. Homeowners typically use the funds to:

  • Pay off high interest debts – Reduce monthly expenses by paying off high interest credit cards, personal loans, and auto loans.
  • Improve credit scores High credit card debt can damage your credit scores even if you make your payments on time. Paying off debt can significantly improve credit scores.
  • Medical, dental, and vet bills – An HEA can help pay for burdensome medical, dental, and vet expenses.
  • Home repairs and improvements – Tap into your home equity to pay for home improvement and maintenance projects.
  • Rainy day or emergency fund – The cost of living is rising fast, so it’s critical to have cash laying around for unexpected expenses like home or car repairs or medical, dental, and vet bills.

How Much Can You Get?

The no income home equity loan typically offers cash lump sums of between $30,000 and $500,000. Again, there are no monthly payments, no interest charges, and no income verification.

You can use the funds to pay off high interest debt, reduce monthly expenses, do home improvements, fund college tuition and expenses, etc. Use the cash for whatever you need.

Home equity agreements are not available in all states and not everybody qualifies.

A no income home equity loan or no document home equity loan is virtually impossible to get from a traditional bank or credit union. A home equity sharing agreement offers a good alternative to homeowners who have difficulty proving their income.

Other Considerations

This no income home equity loan is a legitimate product, but there are some things you’ll want to consider before signing on the dotted line:

  1. The time limit – Remember, the investor wants their investment back plus their share. If you don’t sell your home, you’ll need to pay off the no income home equity loan with cash and/or another loan.
  2. Closing costs – The no income home equity loan has at least some closing costs, which can equal 3%-6% of your payout. HEA companies often charge origination fees along with the usual home loan fees like title, escrow, recording, appraisal, credit report, etc.
  3. Additional fees at buy out – You may have to pay additional title, reconveyance, escrow, appraisal, and administration fees when the HEA company processes the final buyout.
  4. Maintain your home – If you let your home fall apart, the investor may assess a so-called “maintenance adjustment” on the home value at the time of the buy out. In other words, they increase the final value to what the home should be worth had you maintained it and figure their share based on that number.
  5. Difficulty getting a regular mortgage – HEAs are unique and few mortgage lenders and professionals understand how they work. You could find it difficult or impossible to get a regular mortgage without first paying off the home equity agreement.
  6. Default – Even though there’s no payment, it’s still possible to default. Default events include falling behind on mortgage payments, property taxes, homeowner’s insurance, and HOA dues (if applicable. Other defaults could include zoning restriction violations, unpermitted additions and modifications, bankruptcy, and letting the home deteriorate. If you default, you may have to reimburse the investor various fees incurred to work out and resolve the default. If the default is serious and can’t be resolved, you could face foreclosure.
  7. Complex and unfamiliar terms – Home equity agreements are very different from what most homeowners are used to. Even if you’re working with a reputable company who discloses and explains everything thoroughly, it can be easy to overlook important considerations that could have a significant negative impact in the future.
  8. Not available in all states – The home equity agreement is relatively new and a bit of a niche home equity product, so it’s not available in all states.

As you can see, there are some things to consider to make sure it’s a good fit, but this is still a great option for many homeowners.

As long as you uphold your end of the bargain, it can be a great way to access home equity to pay off other debt, cover medical bills, do home improvements, or make a large purchase.

Just make sure you understand the terms and potential downsides thoroughly before you sign the final agreement. You may want to enlist a trusted advisor to review the terms as well.

A Great Option for Many Homeowners

In a “normal” world, it would be tough to find a home equity loan without income. Fortunately, a regular bank or credit union with their tough underwriting requirements is no longer your only option.

If you’re looking for a no income home equity loan, the home equity agreement may be a good option. It enables you to convert home equity into cash with no monthly payment and zero interest charges even if you can’t verify income and your credit is less than perfect.

You can use the funds for whatever you like, including paying off debt, home improvements, college expenses, starting a business – or anything else you can think of.

If you’d like to get a free quote, click the button below.

Can you get a home equity loan with no income?

Yes, it’s possible to get a no-income home equity loan, but not from a traditional bank. We recommend checking into a home equity agreement, which is a type of no income home equity loan that doesn’t require income verification for most borrowers. You can find out more about this unique home equity option on this web page.

How do I qualify for a HELOC with no income?

It’s very difficult to qualify for a HELOC with no income. We recommend checking into a home equity agreement, which is a type of no income home equity loan that doesn’t require income verification for most borrowers. You can find out more about this home equity product on this web page.

How much income do you need for a home equity loan?

How much income you need depends on how much your monthly expenses are. Lenders typically add up all of your debt payments, monthly property taxes, monthly homeowner’s insurance, and HOA dues (if applicable), then divide it by your monthly gross income. Lenders typically want the resulting debt-to-income ratio to be around 45% or less, but guidelines can vary from lender to lender.

Is it possible to get a home equity loan without a job?

It’s very difficult to qualify for a regular bank home equity loan without a job. Few banks offer a no doc home equity loan. We recommend checking into a home equity agreement, which is a type of home equity loan that doesn’t require income verification for most borrowers. You can find out more about this home equity product on this web page.

Can I get a no income verification home equity loan?

Yes, it’s possible to get a no income home equity loan, but not from a traditional bank. We recommend checking into a home equity agreement, which is a type of no income home equity loan that doesn’t require income verification for most borrowers. You can find out more about this unique home equity option on this web page.

Mike Roberts Avatar
About Mike Roberts

Mike Roberts is the founder of MyHECM.com, a published author, and a highly experienced mortgage industry veteran with over a decade of mortgage banking experience. When he's not working, he enjoys spending time with his family, skiing, camping, traveling, or reading a good book. Roberts is the author of The Reverse Mortgage Revealed: An Industry Insider’s Guide to the Reverse Mortgage, which is available on Amazon.

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