Stated Income Mortgage Loans

If you are looking to purchase a house and don’t want to go through the hassle of having to provide all of the documentation necessary, then a stated income mortgage loan is perfect for you.  Although it sounds too good to be true, a stated income home loan basically allows you to state your income in the for the loan application.  This means that you don’t have to go about trying to prove that you make a certain wage, you can just state it.

You’re probably thinking that this loans sounds too good to be true.  Well it’s not quite as easy as it sounds. First off you have to prove that you are employed.  This means that the lenders will contact your work and verify that you still have a job.  Another thing that lenders will do is run a credit check on you.   By running a credit check they are ensuring that you don’t have any defaults on previous loans.  A decent credit score is necessary for you to be approved for a stated income loan.

When applying for a stated income home loan, there are two main types.  The first type of stated income loan is a stated/income verified/asset (SIVA) loan.  Just like it sounds this loan requires you to state your income and verify your assets. 

This is the less risky of the two loans because of the asset verification. The second type of stated income loan is a stated/income stated/asset (SISA) loan. This type of loan requires you to state both your income and your assets in the loan application. Because this loan requires the least work, you are more likely to pay a higher interest rate.

You should be careful to state your correct income in the stated income loan because lenders will cross-examine your income by using an industry average as a bench mark. This means that if you are putting down a salary that is much higher than the industry average for the same position, you will be declined on your loan. Lenders are looking for honest borrowers who are not trying to cheat the system but are interested in getting the loan.

The last thing you should do before getting a stated income loan is do your research. By looking online at different companies you can save thousands of dollars if you get a lower interest rate. Shopping and comparing ensures that you will get the best interest rates possible on your stated income mortgage loan.