Stated Income Mortgage Loans
Stated income mortgage loans allow people to obtain mortgages
with less paperwork and documentation than a conventional loan.
These mortgages may be preferred by people who have adequate
income that is not produced by a steady paycheck. Some people
prefer them simply because a stated income loan offers more
privacy than a standard loan.
These are the Best of the Best:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
Required documentation - Persons seeking a stated income
mortgage loan will have to produce proof of income and proof of
the source of that income. Generally lenders require that the
income be from the same source for at least two years. A credit
report, tax returns, bank statements and profit and loss
statements may also be required. Applicants should be prepared
to present a list of assets and debts. An appraisal of the
property is always needed. Some lenders may ask for IRS Form
4506 which allows the lender to verify income with the IRS.
Getting approved - There are factors other than the
stated income which will help decide if the mortgage application
is approved. The criteria may include income stability, the
applicant’s debt load and his/her credit score. The appraised
value of the property being mortgaged and the size of the down
payment will also figure into the approval.
Interest rates - A stated income mortgage loan normally
runs about a half a percent higher than a conventional loan.
Depending upon the specific details of the application it may
run as little as an eighth of a point above the standard or as
much as a one full percentage point above the standard.
Here are our recommended mortgage lenders online:
These are the Best of the Best:
(updated )
The average rate of interest on mortgage loans continues to fall and has been under 5 percent for almost all of this past year, with this recent round of rate cuts seen as the lowest for borrowers in years. The reason, many borrowers today have bad or at least less than perfect credit scores. Still a borrower with less then perfect credit an jump through a few hoops and get a fairly decen rate on a loan.
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