What is a stated income loan or stated income loan? Does this type of mortgage still exist in 2018?
Do stated income loans exist in 2018?. I will take you through your options, what you need to qualify and where you can find one of these loans.
In the past and we are going as far back as 2008, true stated income loans did not require you to prove your income at all. Anyone who met the minimum credit score requirements and had the down payment needed could qualify. Stated income loans as defined above no longer exist but there ARE loan programs that will essentially accomplish the same thing for you as long as you are self employed.
What Stated Income Prorgams Are Available Now?
In 2019, only self employed borrowers have a snowball’s chance in getting a stated income loan. Self employed individuals have a problem in that they take all of the legal tax deductions, but then when it comes to applying for a mortgage they are showing a much lower net income. The net income after expenses is what makes it very difficult to qualify for the mortgage.
Solution = Bank Statement Loan Programs
The basic elements of this program is for the lender to see a steady flow of money coming into your bank accounts. They will typically use the last 12-24 months bank statements to get an average monthly flow. They may also combine your business accounts and your personal accounts. The loan to value ratios may vary. It is best to speak with one of our lenders to get the specifics on the program and guidelines in your state. Just click the “Request Quote” form, fill it out and someone will get back to you. Click to read more about bank statement loans.
You may also be able to find Stated Income Loans for Investment Properties. These are much harder to find and often the LTV requirement will be lower with the down payment higher. You can also expect the interest rate to be higher when you are looking for a stated income loan for an investment property.
Frequently Asked Questions
Who Are Stated Income Loans For?
Originally, anyone would apply for a stated income loan but now they are mostly available for self employed borrowers.
How Much Would I Have to Put Down?
That will vary by lender. You may find a downpayment requirement of anywhere from 25%-50%
Is the Interest Rate The Same or Higher Than a Conventional Loan?
Stated income loan rates are typically higher since the lender is taking on increased risk.
Do I Need To Be Belf Employed?
For the most part YES for a minimum of two years.
What Others Are saying
Refiguide.org says that 2018 is a great year for no income verification loans. They said the loans are making a come back and there are more programs today for borrowers than in prior years.
My Mortgage Insider says that stated income loans are great for borrowers who have stacks of tax returns.
CNBC reported that the return of stated income loans is like “housing deja vu again”. I think the writer at CNBC is forgetting a couple of key points here. First, back when the market crashed even salaried borrowers could get a stated income loan. Next, the loans were being packeged and sold as prime. None of that is happening now.
The Mortgage Reports says that there are 14 million self employed borrowers out there and this is a good time for them to get a loan. From the programs to qualifying it is much easier now for self employed individuals.
The Pros and Cons of Stated Income Loans – Mortgage 101
Stated Income Construction Loans – Construction Loan Center
The Mortgage Professor – Scapegoating Stated Income Loans – Washington Post
Stated Income Ruling Regarding Bankruptcies – Bankrate
We are able to help you to find a stated income loan with the best stated income lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.
Hard Money Loan – A hard money loan is one where a private lender will take a risk in lending money for the purchase of your home without asking for a bank statement, pay stubs, alternative documentation, or any of the typical documents that would normally be required. They will ask that you have a larger down payment, the interest rate would be higher and in some instances the term will be shorter. A hard money loan is different than a stated income loan and is something that you would do as a last resort.
Qualifying for a Stated Income Loan Before The Mortgage Meltdown
In exchange for the additional risk referenced above, stated income lenders will typically have higher interest rates for these loans. There are lenders in the northeast who provide excellent rates for stated income mortgage loans states such as: New Jersey, New York, Pennsylvania, Massachusetts, and Connecticut. There are many requests for stated income mortgage loans in California and other states, but the rates were not nearly as competitive. In fact, California has big problems right now because there are many self employed borrowers there, and only a handful of mortgage lenders who are into the stated income lending business.
Stated Income Loan Requirements
Most stated income lenders required a minimum of 20% down or equity in the property plus a credit score greater than 640. Some stated income mortgage lenders may have accepted a lower down payment, and lower credit score requirements. Stated income lenders in California may require a larger down payment and the rates will most likely be a bit higher.
Most stated income lenders require a minimum of 40-50% down or equity in the property plus a credit score greater than 700. Some stated income mortgage lenders in New Jersey, Connecticut and Pennsylvania only require 30% down and there are no minimum credit score requirements. Stated income lenders in California may require a larger down payment and the rates will most likely be a bit higher.
Many people feel they need a no doc loan or a stated income loan but that may not necessarily be true. You should understand your mortgage loan options before doing anything. Then speak with a loan officer to get a free stated income rate quote based upon your particular scenario.