Stated income loans are pretty much what they say on the package: in order to apply for one, a borrower simply states their income, skipping the part where the lender verifies it by doing an in-depth review of their pay stubs, tax documents, and other paperwork. Stated Income Loans use the borrower's assets to see if they qualify. Borrowers state their reasonable current income in their 1003 and their monthly income is verified to see if it is supported by their liquid assets pre-closing.
How Do Stated Income Loans Work / Who Do They Benefit
Stated income mortgages are designed for non-traditional earners — all the same people who benefit from no-doc mortgages, such as the self-employed, people who work for commission, immigrants, and others whose income may be unpredictable and more difficult to verify than regular W-2 employees’. Borrowers will only be required to provide an Asset Based Income Loan Application. This income will be utilized to calculate qualifying debt to income ratio.
Stated Income Loan Requirements and How To Qualify
· Borrower’s assets need to cover at least 6-month deposits of monthly income
· Self-employed borrowers may need a simple CPA letter
· Borrower must have a good credit score
· Borrower must put down a large down payment
· No P&L Needed
· No WVOE Needed
· 12 months reserves calculated on PI
· Gift funds allowed
· Loan amounts up to $2.5M
· Purchase & No Cash out available