No Income
Verification Home Equity Loan
A no income verification home equity loan is a
second mortgage loan that does not require you
to provide income documentation to qualify for
the loan. This type of loan is great for
homeowners who need a home equity loan but have
hard to document income.
The majority of borrowers with hard to document
income are either self-employed or commission
based employees. Consumers who fall under these
categories may have high income but have a lot
of business related deductions that they write
off on their taxes. This is good on the one hand
as it reduces the taxable income and thus the
amount of taxes owed, however, when it comes to
getting a home loan it can hurt as most lenders
use the average of your last 2 years taxable net
income (the amount left after all of your
deductions) to determine your income figure for
qualifying purposes. This may cause you to have
a debt to income ratio problem if you have a
high debt load and thus keep you from qualifying
for the loan. With a no income verification home
equity loan, however, your gross income can be
used for qualifying purposes as opposed to the
net income.
In order to qualify for a no income verification
home equity loan you will, in most cases, need
good credit and a high credit score. Expect to
pay a higher rate for this type of loan as
opposed to a traditional loan in which you have
to document your income. Also, even though a no
income verification loan does not require you to
document your income, some lenders may require
that you have a certain dollar value of assets
on hand which must be verified. Not all lenders
have this requirement though - some lenders
offer a program called NINA which stands for "no
income no assets" meaning you do not have to
document either. Loan guidelines and rates vary
from lender to lender so it is a good idea to
shop around to increase your chances of getting
the best deal available to you.
This article is the property of
www.1st-in-homeloans.com, which has been
offering home mortgage services since 2002. To
find out more visit
www.1st-in-homeloans.com
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