A stated income mortgage loan is a great mortgage tool for people who cannot verify all of the income that they earn.With stated income mortgages, when you are filling out the mortgage application you will still need to provide all of your employment information, however that information is not verified through standard documentation such as: pay stubs, 1099s, W-2s, etc. If you decide to use a stated income mortgage your interest rate will be higher due to the added risk the lender takes.
At any point during the processing of your stated income mortgage loan, the underwriter can request income documents still at his/her own discretion. They may ask for income documents if they deem the income stated on the loan application is not consistent with your job or if they do not feel totally comfortable with your home loan application. There are other types of low or no income documentation loans out there such as, no doc. loans, no ratio loans, bank statement loans, and limited doc. loans.
Stated Income Mortgages are ideal for small business owners and those receiving cash tips as a significant portion of their incomes, such as waiters and cab drivers. In many cases State Income Loan may be the only logical loan option as home buyers in these income situations often have difficulty documenting their incomes.
The lender will verify the reasonableness of the income stated for the wage earner is through the Salary.com. If you are at a smaller company, re wording your job title can give you little extra room to state more income if the borrower needs it.
A stated loan is not an opportunity to inflate or falsify your income in order to purchase a more expensive home then you would normally qualify for.
Stated Income Loans do require verification of the existence of your business or employment. Most states have this information available online. If not, then a letter from your accountant/tax preparer verifying your information will satisfy this requirement.
For stated income loans for employed borrowers, lenders will usually verify that the income stated is reasonable for your occupation and experience level.
Home
