Best Home Equity Loans and HELOCs for Self-Employed

When you’re self-employed and applying for a home equity loan or line of credit (HELOC), you may need to take a few extra steps when it comes to verifying your income because lenders can’t rely on an employer-issued paystub or W-2 to confirm how much you earn.

However, getting approved for home equity financing is possible when self-employed. And it’s much easier when you prepare ahead of time. Even if you don’t receive any formal pay stub or income tax form, you can work with lenders that offer alternative income verification methods to help you qualify. 

Can you get a home equity loan or HELOC if you’re self-employed?

Yes, self-employed individuals can qualify for a home equity loan or a home equity line of credit (HELOC), but the process may involve additional steps to verify income and financial stability.

• A home equity loan allows homeowners to borrow a lump sum against the equity in their home, often at a fixed interest rate with fixed monthly payments over a set period. 
• A HELOC provides access to a revolving line of credit that you can draw from as needed, similar to a credit card, often with a variable interest rate.

Eligibility criteria for self-employed borrowers

For home equity loans and HELOCs, lenders generally require:

1. Sufficient home equity: Most lenders require you to have at least 15% equity in your home.
2. Proof of income: Self-employed borrowers need to provide additional documentation, such as two years of tax returns, profit and loss statements, and bank statements, to verify their income. 
3. Good credit score: A FICO credit score of at least 620 is typically required, though some lenders may require a higher score for self-employed applicants.

If you’re a self-employed homeowner, be prepared to demonstrate consistent income over a few years and maintain strong financial records to improve your chances of qualifying. Some lenders may be more flexible with self-employed borrowers, so it can help to shop around and compare options.

Reviews of the best home equity loans for self-employed

Check out our reviews of the best lenders offering home equity financing solutions for self-employed borrowers.

Figure

Best Overall

4.9 _/5

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Why we picked it

Figure works with self-employed borrowers who can verify their income with tax returns and bank statements. You may need to provide bank statements from the last two to four months. If its team sees abnormalities, Figure may request additional information from you to understand why there was a drop in income.  

If you apply and qualify, you can get initial approval within minutes and—pending verification—access your line of credit in a matter of days. Figure lists business financing as one of the ways you can use your funds, so it’s an option if you want to invest in your business using some of your home equity.  

Figure lends up to $400,000 and doesn’t charge late fees, prepayment fees, or annual fees—but the lender deducts an origination fee of up to 4.99% from your credit line. Figure also requires a 100% initial draw, so you’ll max out your credit line at the time of funding.

• Funding in as little as 5 days
• Repayment periods from 5 to 30 years
• Online application

• Not available in New York
• Several months of bank statements may be required
• Origination fee up to 4.99%

HELOC details

Rates (APR)	8.35% – 16.55%
Funding amount	$15,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Min. credit score	640

Aven

Best Customer Reviews

4.8 _/5

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Why we picked it

Aven’s HELOC is a standout choice for self-employed borrowers who may struggle with traditional income verification methods. It offers a tech-driven application process that allows self-employed individuals to verify their income with bank statements or by connecting their accounts directly, making the approval process much smoother for those without W-2s or conventional employment documentation.

The fully digital experience, from application to signing, is ideal for busy entrepreneurs or freelancers. Aven’s system ensures you can get preapproved in minutes and receive your HELOC funding within three days of signing, minimizing disruption to your schedule. 

Aven also supports a high loan-to-value ratio (LTV) of up to 89%, making it an excellent option for borrowers who want to maximize their home’s equity.

Aven’s HELOC product offers fixed rates, offering stability and predictability—an essential feature for self-employed individuals whose income may fluctuate. While Aven’s five-year draw period is shorter than some other HELOCs, it’s balanced by automatic credit line increases and a debt protection program for added financial security.

• Income verification options suited for self-employed borrowers
• Fully digital application and approval process
• Fixed interest rates from the start
• High loan-to-value (LTV) ratio (up to 89%)

• Must draw the full loan amount at origination
• Shorter, five-year draw period
• Available only in 32 states*

HELOC details

Rates (APR)	6.99% – 15.49%
Loan amounts	$5,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Min. credit score	640
Funding time	As little as 3 days after signing

Bethpage

Best Credit Union

4.7 _/5

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Why we picked it

Bethpage Federal Credit Union stands out for its fixed-rate HELOC conversion option and minimal fees. You must join the credit union to apply, but you can become a Bethpage member by opening a savings account and depositing $5. Bethpage asks self-employed borrowers to provide their two most recent bank statements and two most recent tax returns to apply.

Bethpage doesn’t charge application, appraisal, or origination fees. And as long as you keep your HELOC open for at least 36 months, you won’t pay closing costs either.

• 10-year draw, 20-year repayment
• No closing costs or fees
• Convert some or all of your HELOc to a fixed-rate loan

• 35-day funding is slower than other options
• Must be a member of Bethpage FCU

HELOC details

Rates (APR)	12-month introductory rate starting at 6.99% for VantageScores of 720 and up, with variable post-introductory rates starting at 8.50%
Loan amounts	$10,000 – $1 million
Repayment terms	20 years
Min. credit score	670

LendingTree

Best Marketplace

4.5 _/5

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Why we picked it

LendingTree is an online lending marketplace offering HELOCs and home equity loans. Unlike other companies, LendingTree won’t service your HELOC or home equity loan directly. Instead, you’ll use the LendingTree matching tool to check rates with multiple lenders at once. This can help you find lenders happy to review self-employed income without limiting yourself. 

LendingTree’s online data focuses on loan-to-value and debt-to-income ratios more than income. So, if you’re strong in those areas, you may be able to qualify with self-employment income because you have low debt and high home equity.

• Compare several home equity loan or HELOC offers in one place
• No impact on your credit

• Fees and minimum draw requirements vary by lender
• Hard to know whether partner lenders accept alternative income verification

HELOC details

Rates (APR)	Starting at 6.99%
Loan amounts	$10,000 – $2 million
Repayment terms	5 – 30 years

Home equity loan vs. HELOC

Before researching lenders, decide how you want to tap into your home equity. Home equity loans and HELOCs both give you increased purchasing power, but they do so in different ways:

Home equity loan	HELOC
Lump-sum payment	Revolving credit line
Consistent, immediate monthly payments	Divided into draw period and repayment period
Usually fixed rates	Usually variable rates

Home equity loans are beneficial if you need to access a large amount at once, but HELOCs provide more flexibility. HELOCs can make more sense if you have variable expenses, and home equity loans offer access to a large lump sum. Repayment is often a fixed amount over a specified time.

If your income fluctuates each month, weigh the benefit of a stable home equity loan payment against the ability to adjust how much you borrow from a HELOC (and thus, how much you need to repay). You may also prefer access to a HELOC to help even out inconsistent income months or seasonal revenue. 

Also, note that Aven and Figure HELOCs require a 100% draw, so even if you only need a certain amount, you must pull your entire available credit line at the beginning. Once you repay the balance, you can borrow on your own schedule like more traditional HELOCs. 

How to choose the best home equity loan or HELOC

If your self-employment income is variable, you might feel more secure with the flexibility of a HELOC. Once you decide on a product, shop around for a lender. It pays to research and find a lender you want to work with. Before choosing a lender, check customer reviews to ensure it will meet your needs.

Lenders and products will vary in many ways, including: 

• Interest rates
• Fee structures
• Processing times
• Loan terms
• Potential discounts

Lenders may have unique processes for verifying income. Look for options that offer methods besides pay stubs and W-9 forms and compare interest rates. Some lenders may charge a higher rate for borrowers who are self-employed to help mitigate the risk of inconsistent income. But it’s not a rule across the board, so compare your loan quotes to choose the best option. 

After settling on a lender, you’ll gather your information for your application. This often includes personal and financial information and your home’s estimated value. Required financial documents may include personal and business bank statements and tax returns.  

Then you’ll need to get your home appraised (your lender will arrange this), and it will complete a hard credit check. Check out our research on the best home equity loans and best HELOCs.

How to apply for a home equity loan or HELOC if you’re self-employed 

Getting a HELOC or home equity loan for self-employed individuals requires more extensive documentation than if you have a more traditional career.  

Like a traditionally employed borrower, you’ll need to prove you meet your lender’s HELOC requirements and have the means to take on and repay new debt. To do so, you may need to  provide a combination of the following:

• Recent bank statements (at least several months’ worth)—could be personal and business if you have separate accounts
• Business and personal tax returns for the past two years
• A statement from your accountant verifying your business’s health
• Business formation documents and proof of ownership (unless you’re a sole proprietor)

Your lender will let you know whether it needs additional income information during the application process. You should also be prepared to submit homeownership and property insurance records. 

Aside from differences in the paperwork involved, the home equity financing application process is the same for self-employed and traditionally employed borrowers. Because home equity loans and HELOCs are personal financing, make sure the funds are deposited into your individual bank account, not a business account.

Approval and funding timelines vary by lender. Getting a home equity loan or HELOC isn’t as fast as getting a credit card, but it can be faster than many business loans, particularly SBA loans. Anticipate the process to take anywhere from a couple of weeks to a couple of months from when you apply to when you can access your funds.

Alternatives to HELOC or home equity loan for a self-employed borrower

If you’re concerned about your chances of approval when you’re self-employed—or if you applied for a loan and were denied—you may be able to secure funding with these HELOC alternatives:

Alternative	Consider if…
Cash-out refinance	You want to extend your mortgage term to lower payments while your business is in growth mode
Home equity sharing agreement	You have less than two years of business income
Home-sale leaseback	You want to stay in your home as a renter until your business is solid enough to buy a new hour
SBA loans	You’re established and want a low-interest loan specifically for your business

Cash-out refinance 

A cash-out refinance gives you quick access to more cash by replacing your mortgage with a bigger one. You’ll repay a new, larger mortgage in exchange for more money in your pocket. You can often find a lower interest rate with a cash-out refinance than a home equity loan or HELOC.

Home equity sharing agreement

A home equity sharing agreement, or home equity investment, gives an investment company a portion of your equity in exchange for a lump sum. Unlike HELOCs and home equity loans, a home equity shared agreement isn’t a form of debt, so it can be easier to qualify. 

Home-sale leaseback

A home sale-leaseback transaction involves a property owner selling their home and then leasing or renting it from the new owner. This option gives those struggling to qualify for a loan access to immediate cash without moving out of their home. 

SBA loan

The Small Business Administration (SBA) offers several financing options for entrepreneurs, including 7(a) loans, 504 loans, and microloans. SBA loans come with specific usage and eligibility requirements, but if you qualify, these business loans can increase your working capital without using your house as collateral.

FAQ

What disqualifies you from getting a home equity loan if you’re self-employed?

If you’re self-employed, a low credit score, insufficient income documentation, high DTI, or low home equity can disqualify you from getting a home equity loan. An unstable financial history, such as inconsistent income or irregular tax filings, may also raise concerns for lenders.

To qualify, you generally need a credit score of at least 620, sufficient proof of consistent income, a DTI below 43%, and at least 15% equity in your home. Meeting these requirements increases your chances of approval.

Can I get a home equity loan without showing income?

It’s unlikely to get a home equity loan without showing any income, especially if you’re self-employed. Lenders typically require proof of income through tax returns, bank statements, or business profit and loss statements to ensure you can repay the loan.

Some lenders may consider alternative forms of verification, such as consistent cash flow or strong home equity, but income documentation is often required to assess your repayment ability.

Is it hard to get a home equity loan if you’re self-employed?

Getting a home equity loan while self-employed can be more challenging due to stricter income verification requirements. Lenders may ask for additional documentation, such as multiple years of tax returns, business profit and loss statements, and detailed bank records to prove stable income.

To improve your chances, maintain a good credit score, keep your DTI low, and ensure your business has consistent cash flow. Choosing a lender experienced with self-employed borrowers can also simplify the process.

How we selected the best home equity loans & HELOCs for self-employed

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of best home equity loans & HELOCs for self-employed