A no income verification home equity loan is a second mortgage loan that can be availed of without having to submit any income proof for the approval of the loan. This loan is an excellent choice for people who own their homes but cannot provide satisfactory income documents.
Most of the people opting for this type of loan are either self-employed or commission based employees. Their income is high but they have various business-related deductions that are written off as taxes. This benefits them immensely since the taxable income goes down and they pay far less in taxes. But on the other hand, the lenders consider the average of the past 2 years taxable net income or income left after deductions to decide if your income meets the qualifying criteria. As a result, your debt to income ratio increases if your debts are high and thus prevents you from being approved for the loan. But with no income verification home equity loan, your problem is solved, as it uses your gross income and not your net income for qualifying.
To get approved for a no income verification home equity loan, most of the times, the lender will expect you to have good credit and a high credit score. The interest rates on these loans are more than the normal loan where you have to submit your income document. Though a no income verification loan does not ask for any income proof, a few lenders may require that the dollar value of assets on hand should be equal or more than a specific value and you need to provide the proof for this. But other lenders do away with this requirement and conduct a program called NINA, “denoting no income no assets”, means there is no need to provide income or asset proof. Loan terms and rates differ amongst the lenders, so it makes sense to shop around so that your chances of getting the best deal improve.