Why Should I take a
Stated income Loan?
Why should I take a stated income loan? - Stated income loans have both pros and cons. Its important you speak with a mortgage professional to decide which way you should qualify. There are plenty of advantages to taking a stated income loan.
Stated income loans pose a slightly higher risk to the lender, so you can expect to pay a slightly higher interest rate.
An alternative to a stated income loan is to use 12 to 24 months of bank statements to document your income.
A disadvantage of the stated income loan is that some home buyers tend to buy too much "house" than they can afford because they are able to qualify based on their credit score and not by the amount of monthly payments they can afford.
It is very wise that you seek the professional opinion of a qualified mortgage agent who can help you better understand the immediate and long term impacts of a stated income loan.
Stated Income mortgage is ideal for people who receive a large portion of their income in the form of cash. Waitors and street vendors, for instance, can usually benefit from Stated-Income loans because they mostly have income that are difficult to document.
Sometimes a No Income No Asset loan is a good alternative to stated income loans.
One of the primary advantages of doing a stated income loan is for people who are self employed. Often times a self employed person will have many deductions that offset their income. While this is an advantage when paying taxes, it is a disadvantage when applying for a loan because your tax returns will not properly reflect your true income. With a stated income loan you can state what you really earn.
Can wage earners get stated income loans? - Stated income loans used to be for the self employed or hard to prove income. That is not the case anymore.
Wage earners can get stated income loans but there may be more restrictions, higher rates, and lower loan to values. Wage earners that use stated income loans usually have other income that is hard to document.
The point of a stated income loan is for borrowers that have difficulty PROVING the income. Make sure with a stated income loan, that the mortgage payment you will receive will be something you can live with in the future.
You can use a stated income loan for any income that you can't or do not want to provide income documentation for, including wage earners.
The amount of income you state has to make sense for your profession. For example you cannot say that you work as a cashier at Wal-Mart and make $300,000 a year. Underwriters normally use a website such as Salary.com to check the average salary for a given profession in a specific geographic area.
If you have any questions regarding our products, you can contact us by calling or e-mailing us and we'll get back to you as soon as possible. Thanks!
Information listed above is to be used for educational purposes only and is not guaranteed