What Is a Stated Income Loan?
Are you looking to purchase a home or invest in a piece of real estate? If so, then you probably have lots of questions regarding financing solutions. Discovering the best options for your specific needs can take time. To see improved chances of success from your endeavors, you want to be sure that you know all of the different financing options available to you. A stated income loan, for example, might be exactly what you need to land the home you desire. Take time to consider these points to learn whether or not it is a good fit.
Before you can get started with this financing solution, you first need to understand a few key details. For one, this type of loan is slightly different than a standard option. To obtain a mortgage through a vast majority of lenders, you are required by law to show proof of income. This is enforced through regulations like the 2010 Dodd-Frank Act. Since so many lenders made bad choices that led to the major economic recession in the late aughts, getting a mortgage without proof of income is tricky. This type of loan is geared toward helping you achieve this goal.
Essentially, a stated income loan requires you to provide an idea of your income without any specific documentation relating to the amount of money you make. Still, you are unable to obtain a loan without some form of income information. With a stated option, the regulations are a bit stricter. You need an exceptional credit score of no less than 700 and you are also going to need to be able to provide a huge chunk of the total value of the property in cash as a down payment. Without these assets, you will not get the loan.
Who Does This Work For?
More often than not, investors benefit the most from this financing solution. This is due to the fact that the loans are structured in a way that makes sense for people who are working with multiple properties at the same time. Since you likely already have available capital from other investors, you can use this toward the value of the real estate when applying for the loan. Take time to weigh out all of your options to see whether or not this is the right fit.
Landing the piece of real estate you desire can be difficult without guidance. Explore what a stated income loan can do for your future and get started on the application as soon as possible.