Understanding How Stated Income Loan Works

Stated-income mortgage allow anyone applying for a loan to qualify based on non-standard income documentation. While most lenders would want to see your tax returns, local stated income loans office can process your loan based on your overall cash flow, home equity and available assets. This makes it convenient to get a home loan if you rely on seasonal commissions or you are self employed.

Where can you get such a mortgage loan?

If you are in need of a no-income verification loan, the best place to start is researching mortgage brokers or portfolio lenders. If you already have investment or retirement accounts with major financial firms, consider looking into their mortgage lending options. Lenders have their own qualifying criteria but they’ll always settle for individuals with a higher credit score.

Unlike most lenders, any local stated income loan office will need a one year bank statement to determine your cash flow. They might request two appraisals to evaluate your property and your equity stake in it. These are all compensation factors that stand in for the information they aren’t gathering from asset statements or tax returns.

Why should you get a stated income loan?

This is one of the best ways to get a mortgage or personal loan especially if you don’t want to reveal your personal financial information or you’ve got limited employment history. Most self-employed individuals prefer stated income loan because of the fluctuations in their earnings. They also don’t provide pay-stubs or w-2s to verify their income. That is why such loans are great for individuals who do not and cannot provide their tax returns.

Qualification Requirements

Given that borrowers are required to provide different financial and personal documentation which is unlike a standard mortgage, the qualification requirements for this arrangement can be demanding. Mostly, such programs will require a loan-to-value of ninety percent or less.

This means that a borrower will have to make a deposit of at least 10%. This is way higher compared to what is offered by most government and conventional backed mortgages. Such mortgages will also require you to have a good credit score of at least 680 and above.

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