Stated Income Loans
Are you a property investor that owns multiple homes or apartment complexes? Do you have unusual income sources that do not meet automatic underwriting or common loan criteria? You may want to consider a stated income loan. Nickel City Funding, Inc. in Orchard Park, NY is here to explain stated income loans and the reasons that someone may want this type of mortgage.
What is a Stated Income Loan?
A stated income loan sounds exactly how it works. The borrower may be able to state their income without having to furnish pay stubs and tax statements to gain approval. These loans can work for property purchases or for renovation or cash-out financing. Often times, the applicant can get quicker approval, as well. This mortgage program is suited to people who own a business or have non-traditional methods of demonstrating their value or their ability to repay a loan. Many borrowers of stated income loans also own investment properties. Alternatively, they may have urgent needs to pay for or other emergencies.
During the underwriting process of a stated income loan, the borrower can provide bank statements as documentation of their worth. Sometimes they will be asked to provide a larger down payment if they have a sizeable amount of debt. If the loan is of higher risk, then the lender may require a higher credit score or charge higher interest rates, as well. Here is an example of some criteria for a stated income loan:
- A credit score of at least 600-660 (depending on other factors) and a minimum loan amount.
- Bank statements covering a period of 12 to 24 months.
- Non-owner occupied property.
- Minimum 30% down payment (or equity if seeking to refinance).
Why Might Someone Want a Stated Income Loan?
Besides the obvious reason that someone will not be able to meet documentation requirements for traditional underwriting, there are many situations leading a borrower to want a stated income loan. Often times, this person is a property investor that owns multiple assets. The owners may want a fast way to finance repairs or renovations. Others use it to pull out cash and repay other debts.
You may have also been declined from another type of loan program for insufficient documentation of income. In this scenario, you may need a less traditional method and manual loan underwriting. Stated income loans are also ideal for people looking to use their assets to get into real estate investing.
Regardless of your reason for needing this unique type of loan program, it is important to get professional help. Nickel City Funding Inc. in Orchard Park, NY is standing by to help answer additional questions about stated income loans. Contact us today for more information.