Are Stated Income Loans Still Available?
Well, ever since borrowers started defaulting on the ALT-A type loans back in 2006 and still today, most people including realtors will say, "No". However, the reply should be "Yes" in certain cases. Stated income loans have basically been put to bed and thrown out by wholesale lenders and major banks. However, the small regional or local bank may still offer it to borrowers who have A+ credit ratings along with a 25-to-30% down payment (updated April 2012) on a purchase or for a refinance a minimum of 30% equity. As the nation's financial environment is now showing signs of an imminent comeback, so are stated income home loans.
These unique alternative mortgage programs were offered in the early 90s with 25-to-30% down on a purchase loan and known as EZ Qualifier loans or "EZ Doc". These were excellent solutions for borrowers who had distinct financial conditions, particularly for those with income sources from a blend of self employment, commissions, bonuses, or investments. These type of loans are also desirable since they afford borrowers with privacy and discretion in financial affairs. Professional sports athletes, entertainment celebrities, and well paid professionals frequently choose stated income mortgages for this goal.
What is a Stated Income Loan?
The advantages of stated income mortgages do bring associated costs. Since lenders depend on a borrower’s unconfirmed portrayal of income, the inherent risks with these types of loans is a bit higher. As a result, stated income mortgage rates are higher when compared to conventional fully documented home loans. To counteract the possible elevated rates of non-payment and related losses, lenders seek increased returns.
For various mortgage applicants who have very good or excellent credit scores above 720 and are not able to submit traditional income verification, these loans could very well be the sole method to become a homeowner. In this situation, the additional costs coupled with these mortgages are paltry to the advantages the borrower will receive.
What Banks offer Stated Income Loans?
As previously mentioned, it could be your local neighborhood bank or small regional lender to serve your needs. Because they are not available though wholesale channels from just any mortgage broker, a select few who have relationships with some smaller private money sources do offer them but with 40 or 50% down payment or the homeowner needs to have that amount in equity to refinance coupled with a 700 or more credit score. In 2012, there are no large bank “stated income mortgage lenders” per se, but they do exist with smaller regional banks, portfolio and hard money lenders.
Your best bet are the latter two sicne rates are not much higher than traditional full doc loans.
Contact Us to find out which lenders.
