Stated income mortgage loan
stated income mortgage loans are those mortgage loans that are provided on the basis of income stated by a person and in which, borrower is not required to provide any proof of income. stated income mortgage loans have been very popular in countries like United States. However, due to existing mortgage market conditions, some lenders and brokers have discontinued with these loans. Still, stated income mortgage loans are available and for getting best offer, it is necessary that a person makes certain efforts.
These loans were provided in large numbers in late 2003, when refinancing boom ended in United States. Credit scores were used for ascertaining if a person could repay the loan or not, rather than income. With change in employment pattern, many people do not have steady paychecks and face difficulties in documenting their income. Such people like to go for stated income mortgage loans and these include small business owners, independent contractors and people who work on commissions instead of fixed salary. stated income mortgage loans have also proved very useful for those people who are going to start new jobs. There are also some people that do not like to disclose their income and thus, go for above type of loans rather than conventional mortgage s. If any person has been denied mortgage loan due to lack of steadiness in employment etc, stated income mortgage loans are one of few alternatives available.
Important aspects
There are many characteristics of stated income mortgage loans that must be understood properly by a person. First of all, these loans are provided at higher interest rates as compared to other mortgage loans. Reason is quite obvious. If any lender is allowing a person to get loan without proving income, it is certainly taking risk and for compensating same, higher interest rates are applied. Since stated income mortgage loans are generally taken by those people who do not have good credit history, interest is applied at higher rates. It has been observed that interest rates attached with these loans are quarter of a percent to half of a percent higher than other mortgage loans.
Though income of borrower is not verified in these loans, it has been observed that lenders do verify that borrower is employed and his income is realistic on the basis of various parameters like industry averages for any particular business or occupation. Mid to high FICO scores are required for getting stated income mortgage loans. Down payment is another important characteristic of above loans. Some of lending institutions in United States require a person to make down payment of minimum 20% for getting loan. It should be understood here that making large down payment reduces the overall loan amount and monthly obligation of a person is also reduced. However, there are certain lenders that resort to 100% financing.
In the reduced documentation mortgage loans category, stated income mortgage loans are the least expensive and most commonly used loans. However, income stated by a person should be reasonable with respect to assets and occupation. stated income mortgage loans are offered as fixed rate loans as well as adjustable rate loans. 30 year fixed rate loans are one of most popular stated income loans and require 5% equity only in certain cases. For owner occupied residences, 100% stated income mortgage loans are also available. In category of adjustable rate loans, a person can go for 3/1, 5/1, and 7/1 ARM loans.
A person can get stated income mortgage loans for many types of residential units. These include townhouses, single family homes, low rise condos, manufactured or mobile homes, etc. There are also some lenders that offer above loans for second homes, 2-4 unit buildings, high rise condos, investment properties etc. Though underwriting guidelines of stated income loans differ from one lender to another, borrower is generally required to have a minimum credit score of 620. If he has bankruptcy or foreclosures, same must be discharged for at least 3 years. If borrower is employed, last two years of employment should be with same employer. If loan to value or LTV is less than 80%, PITI reserves for 2 months are required. In other cases, reserves for 6 months are required. Some lenders also require at least 5 credit accounts for providing stated income mortgage loans.
Some lenders
1st Continental is one source offering stated income mortgage loans in United States. There is no requirement of pay stubs or W-2 or tax returns. However, borrower is required to prove that he is employed continuously for minimum 2 years. loan amount can be used for refinancing or for purchasing purposes. With good credit score, a person can get up to 100% financing. stated income loans are offered across United States. A person can call at 1-888-427-5442 for getting more information.
Virginia mortgage Bankers is another source offering stated income mortgage loans in United States. Self employed people and people who are not having verifiable income can easily contact this source for getting stated income loans. loans are provided for many types of residential units like single family homes, low rise condos, town houses etc. loan process can be started by filling the online and secured application. Virginia mortgage Bankers can be contacted at 800-961-9121 for getting stated income loans.
Similarly, Real-fast-loans.com is another source that can be contacted for getting stated income mortgage loans in United States. It is located at 18645 Hatteras Suite 124, Tarzana CA. Contact number if this lender is 888-367-2827. A person can get up to 100% finance. These loans are provided for owner occupied condos and homes. Credit score of minimum 620 is required for getting 100% stated income mortgage loans. There is no requirement of cash reserves, down payment etc. Similarly, no income ratios are calculated. 80/20 Combo loans are also offered with 80% 1st mortgage and 20% 2nd mortgage. Services are offered with respect to residential units located in the state of California.
Other Articles
