Are you a homeowner looking for a way to tap into your home’s equity without having to provide proof of income? A cash-out refinance with no income verification could be the solution you’re looking for. In this article, we’ll cover everything you need to know about cash-out refinancing, how it works, and how to qualify for it, even without a traditional source of income.
What is a Cash-Out Refinance?
A cash-out refinance is a mortgage refinancing option where you borrower take out a new mortgage for more than the amount owed on your existing mortgage.
The difference between the two amounts is then paid out to the borrower in cash.
This is a popular option for homeowners who want to access their home’s equity to finance home improvements, pay off debts, or invest in other ventures.
How Does a Cash-Out Refinance Work?
When you apply for a cash-out refinance, you’ll go through a similar process as you would with a traditional mortgage application.
You’ll need to provide documentation about your home’s value, your credit score, and your income (on a traditional loan).
However, with a cash-out refinance with no income verification, you don’t need to provide proof of income or employment.
Instead, the lender will evaluate your ability to repay the loan based on your credit score, loan-to-value ratio, and cash reserves.
Important note: the cash out proceeds CAN be used to cover the reserve requirement.
This loan option can be beneficial for self-employed borrowers or those who have irregular sources of income.
Benefits of a Cash-Out Refinance with No Income Verification
There are several benefits to a cash-out refinance with no income verification, including:
Access to Cash
A cash-out refinance allows you to tap into your home’s equity and access cash for a variety of purposes, including home improvements, debt consolidation, or investment opportunities.
No Income Verification
With a cash-out refinance with no income verification, you don’t need to provide proof of income or employment, which can be beneficial if you have unique income or looking to keep your employment history private.
Faster Closing
The documentation required for approval is significantly reduced when a paper trail for 2 years of income/employment history does not need to be provided. This allows you to close faster than the traditional mortgage process.
How to Qualify for a Cash-Out Refinance with No Income Verification
To qualify for a cash-out refinance with no income verification, you’ll need to meet certain requirements, including:
Good Credit
Lenders will want to see that you have a good credit score before they approve you for a cash-out refinance. A credit score of 660 or higher is typically required.
Equity in Your Home
You’ll need to have enough equity in your home to qualify for a cash-out refinance. The maximum loan to value ratio on a no income verification cash out refinance is 70%.
Example: If the home value is 500K, the max loan amount will be 350K
Reserves
Depending on your credit score, you will need to show a certain number of month of mortgage payments in reserves in savings/retirement/cash out proceeds/etc. (see below grid to determine how much you need to show in reserves).
An important reminder: the reserve requirement can be covered using the cash out proceeds from the refinance.
Work with a lender that specializes in no income verification loans
Most lenders do not offer these loan products.
For that reason, it’s important that you work with a lender that is highly experienced with these loan options.
Credit and Reserve Requirements for a Cash-Out Refinance with No Income Verification
Here is what you can expect:
| Credit | Maximum Loan to Value Ratio | Reserves Needed |
| 740 | 70% | 12 months |
| 700 | 70% | 15 months |
| 660 | 70% | 18 months |
Is a Cash-Out Refinance with No Income Verification Right for You?
A cash-out refinance with no income verification can be a good option for homeowners who need to access their home’s equity but don’t meet tradition income guidelines.
If you have strong equity in your home as well as good credit, and you have been told you don’t qualify for a traditional mortgage due your income or employment circ*mstances, this option may be the way to accomplish your goals.
Conclusion
A cash-out refinance with no income verification can be a great way to access your home’s equity and get the cash you need for a variety of purposes.
This is designed to accomplish your home ownership goals if you’re looking to get approved without proof of income or employment.
I invite you to reach out.
Get your questions answered.
Get a quote for your specific scenario.
Contact a trusted lender or mortgage professional to learn more and discuss your unique situation. Remember to do your research and consider all the pros and cons before making a decision.
FAQs
- Can I qualify for a cash-out refinance with no income verification if I’m self-employed? Yes, self-employed borrowers can qualify for a cash-out refinance with no income verification based on their credit score, equity, and reserves.
- How much equity do I need to qualify for a cash-out refinance with no income verification? The maximum loan-to-value ratio on the new loan is 70%.
- How much can I borrow with a cash-out refinance? The amount you can borrow with a cash-out refinance depends on your home’s value, your equity, and amount of reserves that can be shown (cash-out proceeds can cover the reserve requirement).
- How long does it take to complete a cash-out refinance with no income verifiaction? Typically 2 weeks, depending on appraiser availability.
- What are the fees and closing costs for a cash-out refinance? The fees and closing costs for a cash-out refinance can vary, but they typically include appraisal fees, origination fees, title insurance, and other expenses. The loan typically includes rolling in the costs. The only out of pocket expense would be for the appraisal (Usually around $550-$650 depending on the area).
