Mortgage / Equity

Home Equity
Home Equity Line of Credit No Income Verification

Believe it or not it is possible to get a home equity line of credit with no income verification. This can be done because there are lenders that don’t ask for income verification when they make a line of home equity credit available.

Lenders will make a home equity line of credit available without income verification because such a line of credit is secured by home equity. Home equity is the difference between the value of your home and the amount it is mortgaged for. If the value of your home exceeds the principal of the mortgage you have equity.

The way a secured line of credit works is that the borrower puts up collateral in the form of equity. If you don’t pay off the line of credit the lender can foreclose on the home. This means that lenders are willing to take the risk of making such lines of credit available without income verification.

As with a loan, a lender charges interest on a line of credit. The interest determines how much the payments on the line of credit will be.

What Lenders Ask For

Generally lenders ask for two kinds of information when they make a home equity line of credit offer. First they want to know your credit rating because that shows them the risk they are taking. Those who have a bad or poor credit rating will have to pay a higher interest rate. Those with a good or excellent line of credit will pay a lower rate.

Then lenders ask how much credit you are looking for. The amount of credit you can get is determined by the amount of equity that you have. Generally, the amount of credit is a percentage of the equity borrowed against.

The reason that a lender can grant a line of credit without income verification is that the amount of credit is based on the equity not your income. The lender is looking at the equity not the income level.

Requirements for a Home Equity Credit Loan No Income Verification

Some lenders will grant lines of home equity credit with no income verification if the homeowner agrees to pay a higher interest rate. The lender will simply treat such an individual as having bad or poor credit which means a higher rate will be charged.

Other lenders will require verification of the property value to get such a line of credit. They will ask to see proof you own the property such as the mortgage and title and an assessment.

Assessment and Property Value

You may be required to get your property assessed to determine its value to get a line of credit. In some cases you may have to pay to pay for the assessment.

If your property value doesn’t exceed the principal of your mortgage you won’t be able to get a home equity line of credit. You should always check the prices that homes are selling for in your area before seeking a home equity line of credit. If home sales prices are going down you may not be able to get a home equity line of credit.