|
Stated
Income Loans
(and
winning the lottery)
FACT:
Stated income loans require little verification to receive
money. Stated income loans generally require no pay stubs,
W2's or tax returns. For those who have difficulty verifying
their earnings, stated income loans may just be the answer.
Usually this group includes borrowers that make tips, bonuses
and commission as their sole form of income or are simply
self-employed or are retired and live off of their investments.
When considering a stated income loan as an alternative to traditional
borrowing methods, one does have to have verifiable employment and
some cash reserves or assets. Stated income loans are also known
as No Income Verification Loans (NIV).
Several different types
of stated income loans exist, depending upon the lender. Some stated
income loans are available for those with FICO scores as low as
580 - 640. Usually the borrower's statement or assertion of their
income is enough to get the loan along with some assets. There are,
however, some leaders that offer stated income and stated asset
loans, which means that neither the income nor the assets are verified
by the lender. These loans generally carry a slightly higher interest
rate for the borrower since the lender accepts more risk with this
method.
There may be some other
caveats when applying for a stated income loan such as being with
the same employer for 2 years, several credit accounts and no bankruptcies
within the last 3 years. Also, the borrowers title must match closely
to the stated income. As an example, a high-school janitor reporting
$10,000 per month in earnings would be suspect.
Stated income loans
can be used for new purchases, refinancing your current home and
home equity lines of credit. Some lenders even offer stated income
loans for commercial and non-residential real estate as well.
Stated income loans
may also be desirable for privacy-advocates who are willing
to pay a little more in interest rates in order to keep
their money matters private. No matter which kind of borrower
you may be, stated income loans are at least worth considering
if an alternative is what you need.
NOTCE: This in an update in the year 2010. As of now, stated
income loans are all but a thing of the past. Since the
mortgage meltdown of 2009, lenders are rarely will now to
give out loans involving stated income. Check with your
loan officer as there may be some exceptions still.
Fiction: Do not by any means listen to the above statement
that stated income loans are a thing of the past. They are
also a thing of the present and future as well. People want
to trust strangers and this is why loan officers are bending
over backwards (if they happen to be certified contortionists)
to give you a stated income loan. If you're a garbage man
or janitor, then state your income as $1 million. Just say
that you won the lottery and this will make it all better.
|
