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      03-24-2017, 04:39 PM   #1
Kolyan2k
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HELOC without income verification?

Anyone know if this can be done today? I own a few small properties outright and would like to get HELOC for emergencies but I can't show my income. Basically my wife has some income on w2s but all properties are under my name only. Would anything work here?
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      03-24-2017, 06:41 PM   #2
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I think you would have to put her name on the property. Also, can't you only open a HELOC if you show residency in the property?
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      03-24-2017, 07:08 PM   #3
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Presumably these are rental properties?

I'm not sure if it is impossible to find a HELOC on rental property but it will be difficult. HELOC on rental property with no income verifications seems really unlikely. No doc loans were a bad idea and led to a lot of problems. Banks now try to do a better job making sure someone at least appears able to repay a loan other than through collateral value.
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      03-24-2017, 07:35 PM   #4
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I work at a bank not likely. If you go to a smaller institution you may be able to do it.
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      03-24-2017, 07:40 PM   #5
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Yes, quit-claim the property to your wife. Conventional allow your credit not to be pulled as well. Loan goes in her name, and you can still go back on title at the closing of said loan. Owner occupied vs non owner will determine the LTV Loan to value.

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Originally Posted by Kolyan2k View Post
Anyone know if this can be done today? I own a few small properties outright and would like to get HELOC for emergencies but I can't show my income. Basically my wife has some income on w2s but all properties are under my name only. Would anything work here?
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      03-25-2017, 09:41 AM   #6
Kolyan2k
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I see....

Do I understand it correctly that with HELOC you ONLY pay interest on the money you use and you are not obligated to even use this line of credit at all?

Does it make sense to pay off the mortgage on owner occupied property and then get HELOC instead?
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      03-25-2017, 10:41 AM   #7
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Quote:
Originally Posted by Kolyan2k View Post
I see....

Do I understand it correctly that with HELOC you ONLY pay interest on the money you use and you are not obligated to even use this line of credit at all?

Does it make sense to pay off the mortgage on owner occupied property and then get HELOC instead?
Yes, you understand that correctly. That could be beneficial, if the interest rate is lower with the HELOC compared to the mortgage (generally unlikely). I'm also not sure you can get a HELOC for more than x% of the property value, which generally would be less than a new mortgage (this part I'm fuzzy on, but I've never seen anyone get a HELOC for more than ~20% of their property value).
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      03-25-2017, 11:42 AM   #8
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HELOC is variable rate so not sure why someone would want to pay off fixed rate mortgage and go with just HELOC. HELOCs generally have different options on payments you select upfront - interest only, interest + 1% principal, etc. and have provisions that allow you to convert a portion of the balance to fixed rate (but probably at a higher rate than what you would get on a primary fixed rate mortgage). If going interest only, it is not forever - after a period (say 10 years) you can no longer draw on it and the HELOC needs to amortize with principal payments over the remaining term (say another 10-20 years).

I have a HELOC with U.S. Bank. My borrowing limit on the HELOC was set by reference to a combined (primary + HELOC) LTV of 90%, determined on date the HELOC originated. The limit does not go up as I pay down primary or property value goes up. However, it can go down if the bank thinks I can't repay or the real estate market has a free fall again. The combined LTV allowed varies by lender and it may be influenced by various factors, such as income, credit score, state in which property is located, etc.
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      03-25-2017, 01:21 PM   #9
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My mortgage is variable rate as well. Every month I pay interest, 3.5% But have some cash saved up in bank that I don't use now (possibly would need some money for another investment property or renovation)
I could pay off the mortgage and open HELOC just in case I would need cash later.

Owner occupied property, the one with mortgage is also under my name only, I have no income to claim now, wife obviously lives with me, makes about 50k, our credit scores are about 840.

Ideally it would be nice to invest the cash, but I don't know any risk free or low risk investment that would make me much more then 3.5-4% to cover the bank interest
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