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The Self-Employed Guide to Securing a Stated Income HELOC

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Securing a Home Equity Line of Credit (HELOC) can be a valuable tool for homeowners seeking to leverage their home equity for a variety of financial purposes. This can be particularly useful for self-employed or business owners who may have irregular income streams, yet significant home equity. However, traditional HELOC applications often require detailed income verification. A workaround for such individuals is a Stated Income HELOC, which depends less on income verification and more on the equity in the property. This blog post will guide you through the steps to secure a stated income HELOC.

1. Understand What a Stated Income HELOC Is

A Stated Income HELOC is a type of loan where the borrower states their income without providing traditional proof like pay stubs, W-2 forms, or tax returns. The lender primarily bases the loan approval on the borrower's credit score and the equity in the property.

2. Check Your Credit Score

Even though a Stated Income HELOC focuses less on income, lenders will still need to assess risk – this is where your credit score comes in. A higher score usually indicates that you're a low-risk borrower, which could make lenders more willing to approve your application. Before applying, check your credit score and take steps to improve it if necessary, such as paying off debts or correcting errors on your credit report.

3. Assess Your Home Equity

Home equity is a crucial element in securing a Stated Income HELOC. Home equity is the difference between what your home is worth and how much you owe on your mortgage. The more equity you have, the greater your chances of getting approved for a Stated Income HELOC. You can typically borrow up to 85% of your home's value, less the amount you owe.

4. Shop Around for Lenders

Not all lenders offer Stated Income HELOCs, especially after regulatory changes following the 2008 financial crisis. This means you'll need to do some research and find lenders that provide this service. Credit unions, community banks, and online lenders are places you might consider. When comparing lenders, look at interest rates, fees, and customer reviews.

5. Prepare Your Application

While a Stated Income HELOC doesn't require income verification, lenders still need to assess your ability to repay the loan. Be ready to provide documents like bank statements, a profit and loss statement if you're self-employed, and a statement of your assets. Also, prepare to declare your income honestly, even though you won't have to verify it. Remember, misrepresenting your income is considered fraud and can lead to legal consequences.

6. Consult with a Professional

Securing a Stated Income HELOC is a complex process, and even minor errors can lead to application denial. A mortgage broker or financial advisor with experience in stated income loans can help guide you through the process. They can provide advice tailored to your situation and help you find the right lender.


A Stated Income HELOC can be a lifeline for homeowners with irregular income streams who need access to funds. However, due to the potential risks and complexities involved, it's essential to understand the process and work with a knowledgeable professional. If done wisely and responsibly, a Stated Income HELOC can be an excellent tool to help you leverage your home's equity to meet your financial needs.

Remember, financial decisions should never be taken lightly. Always make sure you are informed, understand

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