Stated Income Loans, plus Alternative Documentation Loans for 2021
There is something a whole lot different about stated income loans now than they were before the housing market crash. Earlier, they were home loans that did not require documentation or income verification. All that the lenders needed was a borrower’s stated income. In this article, we will talk about stated income loans USA and their functioning.
Let’s start with the basics.
What Are Stated Income Loans?
Stated income loans or no-doc loans are the best for those non-occupying investors looking for short-term financing on an investment property they plan to flip or use for rental income.
You might find this staggering, but it has now become illegal for any consumer to get a stated income mortgage for an owner-occupant property. These loans are almost similar to a hard money loan but are considered slightly better as they have a lower rate and fees.
Requirements for Stated income Loans
The requirements for stated income mortgages are slightly higher than that of a typical conventional mortgage loan. You will need a large amount of cash reserves, a good credit score, and many cash reserves.
· High level of income
· Bank statements are needed
· High Credit score requirement
· Large amount in savings
Pros of Stated Income Loans
Here is a list of advantages of stated income commercial loans. Check them out.
1. No income verification
2. Quick loan process
3. No prepayment penalties
4. Quicker to close as compared to traditional mortgages
5. Tax returns not needed
Stated Income Loans Alternatives
When it comes to getting a mortgage, self-employed borrowers face a lot of challenges. A stated-income loan used to be an excellent choice for self-employed borrowers. However, now that it is considered illegal to get on on your primary residence, people are looking for its alternatives.
Bank Statement Loan
This is one of the most effective alternatives to stated income loans. They are perfect for self-employed borrowers as they require less money down and are available to you if you plan on living in the home. Very little documentation is required, and no tax returns are needed.
Asset Qualifier Loans
You qualify for these loans using your assets. You don’t need to prove income or even have an income to qualify. A lender is supposed to use your verified assets as collateral for the loan. You need to have a list of liquid assets and a 10% down payment.
Investor Cash Flow Loans
They are for real estate investors who create an income flow by renting out properties or the ones who flip homes. Employment verification is not necessary with these loans, but 24 months of bank statements are surely required.
Stated Income lenders are not challenging to find as long as you are thorough with what you need. Choose the one that you can rely on for getting hassle-free stated-income loans.
