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smithsara302 · Joined: 12 Jun 2009 Posts: 116 -2.38 Dollars($)

When are there advantages to a no-income verification home equity loan?

savior70 · Posted: Sat Sep 12, 2009 5:41 am Post subject:

Hi smithsara,

No income verification loans are ideal for those who are self-employed or those who cannot verify their income. Whatever the borrower states as his income is taken to be true and the lender does not verify it. However, one disadvantage of these loans is that they charge a high rate of interest. But with the way the current economy is, a no income verification equity loan is a rarity.

eric1 · Posted: Sat Sep 12, 2009 7:13 am Post subject:

I was asked for one of those this week and still cannot find it. Those stated income home equity days are gone for now.

ross090909 · Joined: 04 Sep 2009 Posts: 82 -0.31 Dollars($)

Advantages of no-income verification home equity loans are more helpful for following categories-
1)Seasonal workers.
2)Self-employed.
3)Commissioned people.

You will get benefit from no equity if you work on commission, or you are unwilling to declare your income.
Your income might be from -
A)Tips.
B)Seasonal employment.
C)Commissions.
D)Income and assets.

For stated income equity loan you or your parner has to qualify for larger amount. For this you or your partner must have larger income or higher credit score.But still it is not perfectly OK to declare the higher income of your partner because your FICO is 750 and his is 650, this is a widely spread practice with any stated income loans.

If you have been in the same business or with the same employer for two years, you don't really need a stated income 2nd mortgage/HEL/HELOC. Take advantage of the better rates you can have with full doc home equity installment loans.
High Debt to Income ration will affect Stated income and especially the No Ratio home equity loans adversely.Brokers and loan officers will evaluate your DTI to determine the loan amount you qualify for. If your DTI exceeds the standard for their programs, you will be advised to take smaller amount.

In short you are taking a risk with home equity loans when income is not verified.

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