Stated Income Home Equity Loans

Stated income home equity loans allow you to state your income in a loan application.  These non traditional loans offer a chance for people who are salaried or are self employed to state their income rather than provide the proper documentation.  These types of loans are becoming popular because you don’t have to deal with the same amount of paperwork as a traditional loan. 

An important aspect in getting a stated income home equity loan is your credit rating.  Borrowers look at your credit score to get reassurance that you will repay your loan in good time. When applying for a stated income loan be sure to look online for a free credit report and see exactly what your credit rating is.  Knowing your credit is a good way to gauge how receptive potential lenders will be to your application.

Another part of stated income loans that you should be aware of is there are two types.  The first type of stated income loan is a SIVA (stated/income, verified/asset) loan.  The type of loan allows you to state your income, but requires you to verify your assets. 

You just need to produce bank documents of the different assets you own.  The last type of loan is a SISA (stated/income; stated/asset). This loan allows you to state both your income and your assets to the lender. 

After you have stated your income to the lender, they will want to see proof of employment.  This is to ensure the lender that you have a current income and will be able to make payments on the loan.  One thing that lenders will also do is look for the average wage for you occupation and cross examine it with your stated wage.  If the wage you state is over the average then odds are they will decline your loan.  This is to ensure that you are being honest in the application and are not overstating your loan.

Because stated income home equity loans riskier than the traditional verified loans, they tend to have higher interest rates. Given the fact that the borrower could overstate his/her income, lenders have to cover the excess risk by charging a premium on the loan.  One way to get around this is to look online at the different companies that do stated income loans.  You are likely to find a good interest rate out there if you do the work. Remember to look around and you are guaranteed to get a good deal on a stated income loan.