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Stated income mortgage loans are for all borrower’s and can help borrowers get a mortgage without using tax returns, W2 or paystubs. Because self employed borrowers tend to have many more expenses and deductions then wage earners, their tax returns show much less available income.
Custom Mortgage has many available mortgage programs to help self employed borrowers get mortgages when traditional banks cannot approve their loan application.
A stated income mortgage loan is a type of home loan in which the borrower is not required to provide documentation of their income to the lender. Instead, the borrower states their income on the loan application, and the lender relies on the borrower’s creditworthiness and assets to determine their ability to repay the loan.
Stated income loans are also known as “no income verification” or “no doc” loans, and were more common before the 2008 financial crisis. However, due to increased regulatory requirements and stricter lending standards, stated income loans are now much less common and typically only available to borrowers with strong credit and a significant amount of assets.
One of the main advantages of a stated income loan is that it can be quicker and easier to obtain than a traditional loan, as the borrower does not have to provide as much documentation. However, stated income loans also carry more risk for the lender, as they have less information to determine the borrower’s ability to repay the loan. Additionally, borrowers may be tempted to inflate their income in order to qualify for a larger loan, which could lead to loan defaults.
Overall, stated income loans are a less common form of home loan and are typically only available to borrowers with strong credit and a significant amount of assets. They can be quicker and easier to obtain than a traditional loan, but they also carry more risk for the lender and borrowers may be tempted to inflate their income to qualify for a larger loan.