Stated Income Loans Are Back
Stated income loans used to be popular a few years back, and there were plenty of stated income lenders that were available. These lenders had flexible guidelines and offered low stated income rates– but once the credit crisis hit, lenders started to pull their stated income programs. Stated income loan programs helped people with unique situations, which is why many, especially small business owners, started having issues getting loans once they were no longer being offered.
Stated Income Loans are favored by many. Here are some types of borrowers that may consider getting a stated income loan:
- People who are highly commissioned, who may have a low salary base but make most of their earnings through commission.
- Self-employed individuals who own a small business
- People who cannot prove documentation for at least 2 years of income at their current income levels.
- Individuals who make plenty of money but do not want to disclose their income information.
In 2016, Guidelines Vary By Lender
Since stated income loans are being offered by lenders again, borrowers are able to receive loans and get help with refinancing their current home or buy a new one with a mortgage loan. Different lenders, typically means different guidelines. A lender will establish a stated income product and then develop guidelines around it– ultimately, producing varied guidelines from lender to lender. These various stated income programs will usually have certain nicknames like:
- “Low doc”
- “No doc”
- And many more
Stated Income Lenders
Not all lenders offer stated income loan programs. The majority of loan officers know that having a stated income lender can immensely help a small business owner get into a home. Stated income lenders are typically smaller lenders, who come up with innovative solutions, stated income products, and flexible guidelines. These assets help attract good business, which creates a beneficial result for all parties involved.
Stated income loan programs will all be different based on the guidelines that are set by each, individual lender. For example: Lender A’s NINA loan will probably have different guidelines set than Lender B’s NINA loan. This is why it is important to shop around when considering a stated income loan.
Stated Income Interest Rates
Similar to guidelines, stated income interest rates will vary by lender, as well. You can anticipate for a stated income loan to have higher interest rates than a FHA loan, however, nothing that is out of the market. Stated income loans carry a premium and they will have to be competitive. Guesstimate a few percentage points higher than a FHA loan and you should be in the right ballpark for a stated income interest rate.
Frequently Asked Questions
What is a SIVA loan?
SIVA, or Stated Income Verified Asset, is a type of loan that allows you to state your gross monthly income. This loan requires the lender to confirm assets, which is usually done by providing your bank statements, brokerage statements, or some documentation that verifies your claimed assets on the loan application.
What is a SISA loan?
SISA, or Stated Income Stated Assets, is a loan that has guidelines that allow you to state your income and assets. This means that you will not have to verify assets nor income.
What is a No Doc loan?
Even though guidelines will vary by lender, a “no doc” loan program does not require you to verify anything other than your citizenship.
Can I be declined if I state my income too high?
Yes, it is possible to have your loan declined because your stated income does not match your job title and description. For example: if you are a server who claims you make $50,000 per month, an underwriter would take a second look at your file. Underwriters use resources that allow them to see the range of pay based on a job title and description. Though they are not always accurate, underwriters are typically in the right ballpark.
There is also a possibility that an underwriter or lender will require you to fill out an IRS Form 4506. This allows the lender to request IRS verification of your tax returns over the last two years.
Is there a minimum credit score?
Yes is usually the answer, here. However, minimum credit score requirements will vary by lender and program.
Is there a minimum down payment required?
Again, yes is the typical answer, here. But minimum down payment requirements will also vary by lender and program. Generally, stated income programs will require a higher down payment than that of conventional loans.
Getting the Best Deal
Getting a stated income loan will require you to do a little bit of shopping around, since not all lenders offer stated income loans and the lenders that “do” stated income loans usually only offer select products. In 2016, it may be easier to find multiple lenders with the same loan than it would be to find a lender who will offer you the right loan for your situation. Searching for the right lender is simple is you start here. All you need to do is submit your information and we will work on matching you with a lender who will work the best with your situation. Getting matched with the right lender is free, easy and fast– so start now!