HELOC on mortgage-free house, without a W-2

[Lisa Sluss]

Hello all,

I'm trying to obtain a HELOC on a property I own free and clear. Actually, I own two houses free and clear (including my residence), both in Atlanta. The problem I keep running up against is the fact that I don't have a W-2 to provide to the bank, and my adjusted gross income on my taxes isn't very impressive. I live very modestly off rental income. I'm NOT interested in a hard money loan. I don't understand why a bank won't loan me money on a mortgage-free house. It seems very low risk. They would be the sole lien holder on my house. Any advice and/or names of banks that may work with me would be greatly appreciated.

[Bob Norton]

@Lisa Sluss Typically, banks lend based on your income and ability to pay back the loan, not on the basis of the real estate you use as collateral.  They don't want the asset, just the loan repaid.  So, you could consider talking to all the banks in your area.  You may be able to find one that will understand real estate financing and that will consider your rental income.

If you are considering the HELOC for real estate investing, then you can put together a simple plan that will explain what you intend to use the funds for and how it will be paid back.