Getting a Home Equity Loan with No Income
Home equity loans offer valuable relief in times of financial hardship. However, what if your hardship includes job loss? Keep reading to learn more about getting a home equity loan with no income.
Can You Get a Home Equity Loan with No Income?
You can absolutely get a home equity loan with no income.
Home equity lenders primarily evaluate your application based on your home’s value. This differs from other types of lenders (i.e. those offering mortgages), which treat income as a key indicator of whether you’ll be able to keep up with payments.
But how does this work? Why are you able to get a home equity loan with no income if other types of lenders say no?
Well, home equity loans are a bit different than other types of borrowing. For one, they’re secured. Home equity lenders know you have the money to repay them – it’s in your home!
One major reason banks won’t give you a personal loan without proof of income is that they have no assurance of equity that would allow you to make good on the debt.
Even if you’re sitting on a substantial bank balance, unsecured lenders have no way of knowing you won’t simply go out and spend it all as soon as they approve your loan.
When a loan is tied to an asset such as your home, however, lenders can relax a bit. This is also why home equity loans tend to come at much lower rates than other types of borrowing. Compare our rates here.
How to Get a No Income Verification Home Equity Loan
Given how this type of borrowing works, you generally don’t need to seek out a no income verification home equity loan. Rather, if the lender inquires about your income, you can simply be upfront about it, knowing it will have little to no impact on your application.
At Alpine Credits, we rely on a very transparent set of criteria for evaluating home equity loan applications. As stated on our FAQs page, income is not a major factor, which makes us a very popular vendor for those seeking no income verification home equity loans.
About Stated Income Home Equity Loans
The term “stated income home equity loan” is synonymous with “no income verification home equity loan”. It simply means that the lender will take you at your word concerning your stated income rather than requesting verification.
This is helpful not only for those with no income but also for those with an irregular income. For example, salesmen who earn the majority of their income from commissions might have a hard time proving their stated income without pulling together numerous pay stubs, none of which might give the lender an accurate picture of their cash flow.
With a stated income home equity loan, this isn’t a concern. You state your income and the lender trusts the declaration.
Benefits of Getting a Home Equity Loan with No Income
We’ve already touched on the major benefit of getting a home equity loan with no income, which is that you have very few – if any – other options. Here are a few more.
Keep Your Equity Growing
Individuals with no income are often forced to dip into their savings and investments to cover costs. This sets you back financially by limiting compound interest’s ability to grow your wealth over time.
For example, say you were forced to cash out of your RRSP early. You’d miss out on years of market growth, ending up substantially more financially unstable in the long run.
The same applies to selling your home in order to free up cash. You’re removing that money from the housing market, which has historically delivered tremendous returns.
With a home equity loan, however, that money remains in the market. As your home rises in value, so will your equity.
Get a Larger Loan Amount
Getting a loan of any amount is challenging when you have no income. If you need a loan amounting to several hundred thousand dollars, your odds of approval are particularly slim – unless, of course, you’re borrowing from yourself, which is what a home equity loan is.
As long as the amount you’re seeking exists in the form of home equity, you can get a loan. That could be $10,000 or $200,000. It’s your equity – you can use it.
Enjoy Lower Interest Rates
Even if you’re able to get approved for an unsecured loan without any income, the interest rate will likely be quite high to account for the increased risk.
Because home equity loans are secured, you’ll typically enjoy a much lower interest rate upon approval.
Home equity lenders are often more willing to work with you on adjusting payment terms thanks to the assurances we previously discussed. During hard times, for example, they might allow you to make interest-only payments or even defer payments altogether, which was common during the COVID-19 pandemic.
Easy Application and Approval
The application process involved with a typical loan can be grueling. In addition to carefully verifying your income, lenders often ask prying questions. You have to endure this while knowing you’re unlikely to get approved without income.
The home equity loan application process, however, is quite different. At Alpine Credits, we strive to approve applications within 24 hours. Once you’ve been approved, we can deposit the funds directly into your bank account.
It’s all a very smooth, painless process, unlike what you’d find at banks that can string you along for weeks before issuing a decision.
Contact Alpine Credits for a Home Equity Loan with No Income
Whether you have low income or no income, Alpine Credits will give your home equity loan the consideration it deserves. Visit this page to learn more about how our loans work and start your application today.
We look forward to providing you the same high-quality service we’ve given countless Canadians throughout our 50-year history.
Frequently Asked Questions
A home equity loan can help you take advantage of lower interest rates. Keep in mind, however, that you would only be able to do this on the amount of money existing as equity in your home. Any amounts still owed to your mortgage lender cannot be touched.