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Will Cook's Mortgage Blog

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By Bill Cook | Mortgage Broker
or Lender in Lake Forest, CA
  • Stated Income Loans Can Be Found In Select Regions

    Posted Under: Home Buying in Los Angeles, Financing in Los Angeles, Credit Score in Los Angeles  |  January 6, 2013 10:14 AM  |  1,954 views  |  No comments
    Stated lncome mortgage loans are very different than a typical home loan and a very specific type of loan program.  It’s a loan program that doesn’t require borrowers to provide any income documentation or tax returns. While more traditional loan calls for paystubs (or 1099s) and tax returns because the lender wants to be sure you are a safe and responsible borrower.

    With a no income verification loan borrowers do need a 25% down payment of (or 25-percent plus equity for a refinance) and an excellent credit history of 700+ since it is a higher risk loan for lenders because there is little documentation.

    The U.S. Govt has passed laws that says Fannie Mae and Freddie Mac are not allowed to buy stated income loans, and FHA and VA have never offered them. So, it is hard to find to say the least. Not many lenders offer this loan anymore, but to accommodate a segment of borrowers with complex tax returns, large down payments, and excellent credit, they are available by select portfolio lenders in high cost areas of the country like New York, New Jersey, California, Hawaii, and Florida.

    Stated income loans are ideal for self-employed borrowers who own businesses and receive 1099 commission incomes in New York City, Los Angeles, San Diego, and Honolulu. They need this type of option. A lot of self-employed individuals learn it is difficult to qualify for conventional loan programs as it can be very challenging to establish a steady income. Nearly all loan programs demand that a borrower submit paycheck stubs, W2 tax forms, bank statements and more. For a self-employed person, demonstrating a constant annual income can be hard due to the fluctuations in their business income which may be derived from numerous sources.

    Because stated income loans usually have a faster closing time than a traditional loan as there is much less documentation there is less time required to verify paperwork so the closing period is much quicker. If you need a faster closing this might be the option for you.

    If you are self-employed and these issues have stopped you from qualifying for a loan then a stated income mortgage may be a good choice for you. Read more about these programs from lenders at http://www.loanshoppers.net . As of 2013, you see more lenders with portfolio programs entering this segment, especially since there are confirmed housing recoveries in the hardest hit regions of the country.
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