Stated income loans are mortgages that don't require you to provide documentation of the amount of income you make. As a result, verification of income isn't a necessary factor to qualify for this type of loan. However, you'll still be required to provide information about your employment, residency, and credit history. You'll also be expected, as the name of loan suggests, to state to the lender the amount of income you bring in so he or she can assess the size of the loan you can qualify for. Since lenders don't require you to provide the documents necessary to verify the income figure you tell them, they take on a risk that the amount you state isn't accurate. As a result, they may charge you a higher interest rate than they would for conventional loans that require income verification. Stated income loans are generally beneficial to applicants who have income sources that are difficult to verify though traditional means like pay stubs and tax records or whose income fluctuates from year to year. Applicants for this type of loan often include self-employed people, individuals with investment income, or homebuyers with sales jobs of varying commission. Stated income loans typically require good credit and a 20 to 25 percent down payment.
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