Can I Get a Home Equity Loan With No Income?

by Leigh Thompson, Demand Media
    Home equity loans use the equity in your property as collateral.

    Home equity loans use the equity in your property as collateral.

    No income equates to no ability to repay the home equity loan. You will be hard-pressed to get a home equity loan with no income at all. If you face unemployment but have other sources of revenue, you have a fighting chance. With absolutely no money coming in, you need a cosigner for your application -- but even that may not be enough to get an approval. You also need a convincing strategy on how you intend to pay off the loan off with no income.

    Unemployment

    With equity in your home, a home equity loan could ease the burden of paying the bills if you lose your job. Lenders consider a loan a gamble. They are betting on your ability to repay and your likelihood of doing so. If you have documentation of unemployment income, rental income or other streams of revenue, you may be able to get a home equity loan.

    Cosigner

    A cosigner is a third party who qualifies you for a loan based on his income and credit history. He signs your loan paperwork, guaranteeing payment for the lender in the event you default. In some cases, a cosigner may get you an approval where all you see is a denial. It depends on the lender you choose and its underwriting guidelines. Other factors could work in your favor, depending on your financial situation.

    Equity

    The lender places a lien on the property that provides security for a home equity loan. The lender may be more lenient if the property has no other liens. You also may receive a better reception if you have a large amount of equity in the property.

    Credit Score

    When you have no income, your application must be otherwise pristine. Your credit history should shine, with a high credit score, no late payments or collections, and a low debt-to-income ratio. Without a flawless credit history, you are not going to sway a lender to approve a home equity loan.

    Reconsider

    Equity in your home is a tempting place to get some cash to fund your hardship. Consider the side effects of doing so. The lender will foreclose on the property if you cannot pay the bill, leaving you without a home.

    About the Author

    Leigh Thompson began writing in 2007 and specializes in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor's degree in business and personal finance.

    Photo Credits

    • Creatas/Creatas/Getty Images