Monday, May 28, 2012

Stated Income Mortgage Loans

No Income Stated Mortgage

No income stated mortgages are a very specific type of loan program. It is very different then a typical home loan. The way it works is just like it sounds; it’s a loan program that doesn’t require you to state any income and requires much less documentation. Where a more traditional loan requires a lot of documentation because the lender wants to insure themselves you are a safe and responsible borrower. With a no income stated loan you do need almost perfect credit and in most cases a fairly high down payment is required since it is a much riskier loan for lenders because there is so much less documentation. Not many lenders offer this loan anymore, but I do. If you are in Manhattan, Brooklyn or Long Island I’m one of the few lenders left that offers no income stated mortgages.

No income stated loans are perfect for self-employed individuals. Many self-employed people find it hard to qualify for traditional loan programs because it can be very hard to prove a steady income. Most loan programs require that a borrower submit W-2 forms, check stubs, gross income amounts and more. To a self employed individual it can be difficult prove a consistent yearly income because of the ups and downs in their industry or income from multiple sources. If you are self employed and these factors have stopped you from qualifying for a loan then a no income stated mortgage might be right for you.

Another major reason someone would go with a no income stated loan is because they tend to close much quicker then a traditional loan. Since there is much less documentation there is much less to verify which of course makes the closing much simpler and quicker. If you need a faster closing this might be the option for you.

A no income stated loan is a loan program that isn’t for everyone, but it does have its advantages for specific situations.