Homeowners across America are tapping into their home equity using this 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.
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If you’re reading this, you probably already know how tough it is to find a no income home equity loan or so-called 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 pretty much impossible to get a home equity loan from a regular bank.
We recommend that you don’t waste your time checking with banks for a no document home equity loan.
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, you just have to know where to find it.
The No Income Home Equity Loan
Homeowners across America have discovered 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 big advantage if your expenses are already tight.
Because there are no monthly payments, there are no income requirements for most applicants. You can qualify for this home equity loan without a job even.
- 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.
A no income home equity loan can be a great option for self-employed homeowners who have difficulty proving income.
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.
For most homeowners, there are no restrictions on how you use the funds. You can use the money for pretty much whatever you like. Click here to see if you’re eligible for an HEA.
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.
The no income home equity loan is not available in all states and not every homeowner qualifies. Click the button below to get a free quote with no cost or obligation.
Get a Free QuoteWe partner with Unlock, a leading provider rated “Excellent” on Trustpilot. Click the button above to go to the Unlock website and check your eligibility for free and with no obligation. We may be compensated if you complete an application.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Not available in all states – A home equity agreement is still very much 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.
Remember, even though there’s no payment or interest, it’s not without cost. You’re just deferring the cost to a future date.
Get a Free QuoteWe partner with Unlock, a leading provider rated “Excellent” on Trustpilot. Click the button above to go to the Unlock website and check your eligibility for free and with no obligation. We may be compensated if you complete an application.
Can you get a home equity loan without an 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 home equity loan that doesn’t require income verification for most borrowers. Even better, it doesn’t require monthly payments and there are no interest charges. You can find out more about this home equity product 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 home equity loan that doesn’t require income verification for most borrowers. Even better, it doesn’t require monthly payments and there are no interest charges. 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. They 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 income verification home equity loan 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. Even better, it doesn’t require monthly payments and there are no interest charges. You can find out more about this home equity product on this web page.
