What are the alternatives to stated income loans.....
..none, but if you know where to find stated income loans they do exsist!
Stated income loans, as hard as it is to believe, and unique finance for conventional home loans does still exist... if you know who to ask. This article is about a particular type of unique loan called a stated income loan. Stated income loans are mortgage loans where you do not need to prove your income and some say the reason the us is in the terrible economic we are in today. Well... stated income loans do still exist and we can tell you all about them!
After the mortgage meltdown stated income loan and similar mortgage programs were stricken from the portfolio of all the major banks. Because of this a large number of good home owners were left with no financing options, even though they were still paying their mortgage on time and they had good income. Many of the loans these individuals acquired were called stated income loan.
Stated income loans are for individuals who make a good income but cannot always document every time they make. The unfortunate fact is that stated income loan were mostly adjustable rate mortgages that adjusted 3-10 years after the original mortgage was taken out. As these loans matured the "good home owners" have had no way to refinance into a new loan. With the financial indexes low this hasn't been a problem... yet. In the coming years when rates raise and indexes climb these individuals will have no finance options and will be stuck with a high rate and therefore a high payment!
Stated income loan applications are never confirmed, however the income earned must be consistent with the line of work applicant is in. One big compensating factor is showing big liquid assets and a good credit score. Today stated income loan are not back, but if you know where to go or who to ask you may be able to get one from a portfolio lender willing to take the risk. Usually a 700+ FICO is needed, 6-12 months reserves, 30-40% equity and only in a handful of states like CA, WA, OR, TX, NY, NJ, CT, MA, GA... to name a few. Still the federal government is fighting against stated income loan and is attempting to eliminate them completely... which would be a big mistake!
The stated income loan requirement are stringent. You If you can qualify I believe you should get a stated income loan. Its the only help for legitimate individuals who can not qualify otherwise and can make the payments. Stated income loans should be a part of a sound lending practice as long as there is no fraud or stretching the household dollar.
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