Forgotten Your Password?

Need to Register?

Question Icon

Self-employed (newly), can I get a HELOC to get my business started?

I am newly self-employed (read no verifiable income at this time) and want to use the equity in my home to get my business started. Excellent credit (750+), house is paid off, no other debt, no bankruptcy, collections, missed payments, or other factor that would tarnish my credit. I would like to get about 50% of the equity of my house out to get started. I have enough liquid assets to make a monthly payment, but would prefer an interest only payment for right now. Is it possible for me to get this loan and if so any suggestions as to where? The income question stops my big bank cold. Thanks for your response. by heartwood from Towanda, Kansas. May 4th 2013 Reply


Barb Lanis (BarbLanis)
#69 ranked lender in Illinois - 663 contributions

You must have documented income to support the debt, so you won't have any success with the mortgage route. Consider an SBA loan through your local bank. They may use your home as collateral, but if you have a good business plan to present, you may have some luck. Check out the SBA website: http://www.sba.gov/loanprograms

May 5th 2013
1
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

The Financial Reform Bill HR4173 signed into law by President Obama on 8/1/10 outlaws stated income and no doc loans.Section 1411 reads:"'(4) INCOME VERIFICATION.-A creditor making a residential mortgage loan shall verify amounts of income or assets that such creditor relies on to determine repayment ability, including expected income or assets, by reviewing the consumer's Internal Revenue Service Form W-2, tax returns, payroll receipts, financial institution records, or other third-party documents that provide reasonably reliable evidence of the consumer's income or assets..." For this reason, there is no conventional conforming lender in the US that can lend you without verifying your income.. however, when it comes to hard money lenders, they rely on the statement that says "...or other third-party documents that provide reasonably reliable evidence of the consumer's income or assets" Obviously, this is open for interpretation, and for most hard money lenders, a bank statement showing enough deposits into your account monthly to pay your mortgage payment is sufficient.. be advised that most hard money lenders have pretty harsh terms.. high rates, 3-8 points, etc.. but it can be a viable source for funds.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 6th 2013
1
0
Charlie Sparks (CharlieSparks)
#1 ranked lender in New Mexico - 401 contributions

I don't know of any residential mortgage loans that you would qualify for but I do have a commercial option available for start-up business financing. Click on my name at left for contact info and send me an email if you would like more info. Thanks and good luck!

May 5th 2013
0
0
Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

For a General Conventional or FHA loan you need to have a current verifiable income which sounds like you don't so you will need to find a Stated loan program OR if your married just refinance with your wife's income. If not, you are in a pickle.

May 5th 2013
0
0
Sara Deere (Mortgagequeen2)
#16 ranked lender in Missouri - 604 contributions

If you are 62 or older you might consider a reverse mortgage. The line of credit program has a built in credit line growth. Please contact me if you need more information.

May 5th 2013
0
0
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,166 contributions

It is unlikely you will be able to get a home equity loan. You are missing out on one of the biggest questions. Without documentable income, they have no way of determining your ability to repay the loan. Once your been self-employed for two years, they will use the average of those two years of returns to determine your income.

May 6th 2013
0
0
Raymond Denton (Raymond)
#10 ranked lender in Ohio - 224 contributions

Yes, with a Reverse Mortgage. To qualify, you need to be at least 62 years old. Income, credit and employment aren't considered.

May 6th 2013
0
0
Dave Metsker (DaveMetsker)
#36 ranked lender in Oregon - 2,318 contributions

A private lender may make an equity loan, at a higher interest rate than a bank HELOC.

May 6th 2013
0
0
Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 199 contributions

Residential loan will require 2 years of self employment but as others have mentioned you do have options with a commercial loan.

May 6th 2013
0
0
Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

Need verifiable income, or you can try a reverse mortgage or commercial loan.

May 6th 2013
0
0
Subscribe to our news feed.