5

Suppose a jobless person has a fully paid property. He wants to take out a home equity loan. Will the bank reject his loan application due to his lack of salary income as a jobless person? This person has other sources of income such as stock dividends. Will the bank ignore stock dividends as a source of income because it is less stable compared to a salary?

Assume the person has a clean credit track record.

Improve this question
3
  • 1
    How much dividends ($1,000/year, or $40,000/year)?
    – RonJohn
    Commented Feb 18, 2018 at 0:32
  • Assume dividends are around usd35k a year. However, they may fluctuate quite a bit.
    – curious
    Commented Feb 18, 2018 at 1:11
  • 1
    Per my answer, a paid home with no first mortgage is a candidate for a HELOC. Assets justifying a $100K/yr withdrawal make it a no-brainer for a bank. $35K may cut it too close and require a longer application process. Not a slam dunk, but worth asking. Whenever people speak in absolutes, ignore them. "basically impossible" is nonsense.
    – JTP - Apologise to Monica ♦
    Commented Feb 18, 2018 at 17:39

1 Answer 1

Reset to default
7

As Ron’s comment implies, it’s a matter of the numbers. My HELOC recently reached the end of its draw period, and I preferred to keep it active. I opened the conversation with the bank by saying I was retired and no income other than retirement accounts. I put together those documents (I mean copies documenting 401(k) and IRA balances. They did not ask for tax returns.), and 2 weeks later had a fresh HELOC.

It might not be so smooth if there aren’t enough assets or other debt.

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .