Stated-Income

How Long do you Have to Pay Mortgage Insurance?

By

If you put less than 20% down on a home, you’ll likely pay mortgage insurance. This insurance protects the lender should you stop making payments on your loan. The insurance will pay the lender back a portion of the amount they lost by repossessing your home.

Get Matched with a Lender, Click Here.

Just how long do you have to pay this insurance? It depends on the type of mortgage you have.

Conventional Loans and Mortgage Insurance

If you took out a conventional loan, such as a Fannie Mae loan, you pay what’s called Private Mortgage Insurance. Lenders require you to pay this insurance if you make a down payment of less than 20%. By law, this insurance must be canceled by the lender once you owe less than 78% of the home’s original value, though.

There’s even better news, though. You can request cancelation of the insurance as soon as you owe 80% or less of the home’s current value. This may happen sooner than your original mortgage documents show, but it’s up to you to prove that you do owe less than 80% of the home’s value.

If you follow the original amortization schedule, you will know the exact month that you will be able to request that the lender cancel your PMI. You must request the cancelation in writing. If you know your home appreciated, though, you may request cancelation sooner. Here’s how.

First, you must order a professional appraisal. While you can likely get an estimated value of your home on sites like Zillow and Redfin, the lender needs solid proof that the home is worth what you say. With a professional appraisal report in hand, you can determine if you owe less than 80% of the home’s new value by dividing the home’s value by the outstanding principal balance on your loan. If it’s less than 80%, you can request cancelation.

Keep in mind, though, that this is up to lender discretion. Some lenders allow you to cancel PMI early if you can prove your home appreciated, while others don’t allow this method. If that’s the case, you must wait until the anticipated date that you will hit an 80% LTV to cancel the insurance.

FHA and USDA Loans and Mortgage Insurance

If you take out a government-backed loan, such as an FHA loan or USDA loan, you’ll also pay mortgage insurance. In fact, you’ll pay mortgage insurance twice with these loans. The first time is at the onset of the loan. You can either pay the insurance upfront at the closing or wrap it into your loan amount.

Click to See the Latest Mortgage Rates.

You’ll then also pay annual mortgage insurance, which is similar to the conventional loan’s PMI. Unlike conventional loans, though, with government-backed loans, you can’t request cancellation of the mortgage insurance. You pay the premiums for as long as you have the loan.

Luckily, your premiums will drop as you pay down your principal balance, but the insurance never goes away. The lender figures your annual mortgage insurance premium based on the average annual balance of your mortgage each year. They then charge you 1/12th of that amount with your mortgage payment each month.

The only way to get out of paying mortgage insurance on a government-backed loan is to refinance out of that loan program. Many borrowers take an FHA loan because of the low down payment requirements and flexible underwriting guidelines when they first buy a home. Once they are more established and able to qualify for a conventional loan, owing less than 80% of the home’s value, though, they refinance out of the FHA loan. This eliminates the mortgage insurance once and for all.

VA Loans and Mortgage Insurance

The one government-backed loan that doesn’t require mortgage insurance is the VA loan. This program, which is reserved for veterans, requires only a VA funding fee at the onset of the loan. The VA nor the VA approved lenders require mortgage insurance.

The VA does guaranty the loans for the VA approved lenders, though. If a veteran defaults on their loan, the VA pays the lender 25% of the amount lost. This is often much higher than any down payment borrowers make, so it’s a decent risk for lenders to take.

Mortgage insurance is there to help you get a loan with little money down on it. While it seems like yet another pesky fee, it does help you become a homeowner. Without that insurance and/or 20% down on the home, you could find yourself without the home you wanted.

Click Here to Get Matched With a Lender.

Do you Really Need a 20% Down Payment to Purchase a Home?

By

Do you believe that you need 20% to put down on a home before you can get a mortgage? You aren’t alone, but you are incorrect. There are several loan programs, including a conventional loan, that allows you to buy a home with much less than 20% down on it.

Looking for Current Mortgage Interest Rates? Click Here.

While it’s true that you need 20% down on a home if you want to avoid paying Private Mortgage Insurance, you can certainly get a loan without that large down payment. In fact, in some cases, it’s wise to avoid making the large down payment. If you don’t have an emergency fund, saving the money in a liquid savings account may be a wiser choice for you in the first place.

Ways to Buy a Home Without 20% Down

So, what are the ways that you can buy a home with less than 20% down? We list them below.

  • Conventional loans – Many conventional lenders require just 5% of the purchase price of the home to get conventional financing. With this low down payment, you will pay Private Mortgage Insurance, which can add between $30 – $150 to your payment depending on the size of your mortgage.
  • FHA loans – You only need 3.5% down on an FHA loan. You don’t need to be a first-time homebuyer as many people believe to secure this loan either. Anyone with a credit score of at least 580, debt ratios around 31/43, and stable employment may qualify. The FHA also allows borrowers to receive 100% of the down payment as gift funds. All FHA borrowers pay Mortgage Insurance for the life of the loan. Right now, borrowers pay 0.85% of the average outstanding principal balance of the loan.
  • VA loans – If you are a veteran that served at least 90 days during wartime or 181 days during peacetime, you may secure 100% financing for the purchase of a home. This means no money down on a home with a flexible financing program. The VA loan doesn’t require any type of mortgage insurance either. You just pay an upfront funding fee to the VA.
  • USDA loans – If you prefer rural living to city life, you may benefit from the USDA program. This loan also provides 100% financing. In order to qualify, your total household income must not exceed 115% of the average income for the area. The USDA does charge annual mortgage insurance, but it’s only 0.35% of the outstanding loan amount.

Click to See the Latest Mortgage Rates.

What’s the Benefit of a 20% Down Payment?

If there are so many programs that allow you to put down less than 20% on a home, why would you want to put 20% down? There are a few simple reasons.

  • You may have an easier time securing a mortgage approval. The more of your own money that you have invested in a home, the more likely a lender is to approve you for it. The higher down payment can offset a low credit score or high debt ratio, both of which are often risk factors that make lenders turn applicants down.
  • You may get a lower interest rate. The more money you invest in a home, the less risk the lender takes. Because lenders choose interest rates based on the risk that you pose, you may be able to secure that low interest rate you wanted for your mortgage.
  • You’ll have a smaller mortgage payment. The less money you borrow, the smaller your payment becomes. Who wouldn’t want a smaller monthly payment? You won’t’ have to worry about mortgage insurance. Your payment will be principal, interest, real estate taxes, and homeowner’s insurance.
  • You’ll build equity in the home faster. The first few years that you make mortgage payments, you will pay mostly interest on your payments. This means you touch the principal balance very little. This means you gain very little equity in the home. If you make a large down payment, though, you’ll have instant equity in the home.

Keep in mind, though, as we talked about above, it doesn’t always make sense to make the large down payment. If it is going to put you in a financial bind, you are better off keeping the money in a liquid account for financial emergencies.

It also may not make sense to put a lot of money down if you don’t plan to stay in the home for the long-term. If you know you will move in a few years, you won’t pay a lot of interest on the money you borrow, which allows you to keep your money liquid for the purchase of your next home when you do move.

Whether or not it makes sense for you to put 20% down on a home depends on your situation. Talk to a few lenders and get quotes for a variety of situations with and without a 20% down payment. This will help you decide which program would work the best for you.

Click Here to Get Matched With a Lender.

How Much Down Payment Do You Need to Purchase a Condo?

By

test1test1test1

Families and individuals who chose to live in the city may find it hard to look for a house and lot. Those who plan to move from renting to purchasing a home may consider a condominium unit.

Condominiums are popping up all over urban cities in the country. There are even quite a number in suburban locations. They can be a practical and classy alternative when houses and lots in the city are steeply priced.

If you’re planning to get a condo unit, you can still make use of home loans. However, purchasing a condominium can be slightly different from buying a single-unit home.

When you buy a single-unit house, all of it, including its amenities, is yours. In a condominium, you are only buying a unit. All the other common areas are beyond your control. Some lenders may consider a condominium purchase riskier than buying a house. However, when it comes to down payment, it usually is the same.

Dealing with the Down Payment

When it comes to the down payment for a condo unit, the higher the better. If you put at least 20 percent down payment, it will reduce the risk to the lenders.

This is true not just for condo units, but for all properties. The higher the down payment, the more secure the lender becomes. In fact, a higher down payment benefits the borrower as well.

First, if you put a big down payment, the loans principal balance is significantly reduced.  The amount of money to which the interest rate is applied is lower. Another reason is that a bigger down payment results in a lower interest rate.

For a single-unit house, the 20 percent down payment is enough to reduce your rates. For a condo unit, you will have to shell out an amount that’s 0.125 to 0.25 higher for you to get a lower rate.

If you choose to put a down payment that is larger than the minimum required, there is a bigger chance that a lender will approve your mortgage loan. A larger down payment lowers the risk and shows the borrower that you’re serious about purchasing a unit.

Find the best mortgage rates, click here.

Is a Large Down Payment Enough?

If you truly want a good loan with the best rate and favorable terms, you have to do better than putting a big down payment.

A stable employment and good credit will put you on a better ground when applying for a loan. A steady employment means you have a stable income. A good credit means you are in control of your earnings and debts. The combination shows your healthy cash flow, thus, lowering the risk further.

Connect with a lender, click here.

Make Sure Your Condo Association is Approved

What’s the point of having a good loan when your condo association isn’t approved by your lender in the first place?

Condos are different from homes because, in a condo, every unit owner in the area, like you, owns a piece of the condo as well. You own a unit and your control is just confined within the walls of that unit. Everything else that happens outside of it is beyond your control. For example, if many unit owners default on the loan, it can cause the value of your unit to plummet even if you have been paying in full on time.

Almost every lender requires a condo association to complete a questionnaire. This will be the basis to approve the association or not. If your condo’s association doesn’t get approved, you can’t use secure a mortgage loan from the said lender.

Purchasing a condo unit is not impossible. The down payment and the association are two of the important factors to consider when buying one. It is also equally important that you shop for lenders until you find one who is willing to provide the funding.

Remember that a lender will gauge your risk level. Make sure to provide them with all the positive factors that can have a good impact on your loan; anything that can reduce the risk. Some lenders may not be as warm on the thought of condo loans, but there are still many who are willing to provide the necessary financing. Make sure you shop around.

Click to See the Latest Mortgage Rates»

Down Payment Matters: Is Bigger Always Better?

By

 

Down Payment Matters- Is Bigger Always Better?Who can afford a 20% down payment? Wait till you ask stated income borrowers whose minimum down payment is 30%. You’d like to ask, “Why would anyone put that much down payment when you can save up to as little as 3.5% or zero percent down even?” Let these four major benefits answer the question for you.

We can help you get a mortgage.»

A Bigger Down Payment Will Always Be Better

Putting down 20% of the purchase price reigns supreme in terms of:

  1. Private Mortgage Insurance
  2. Monthly Payment
  3. Costs and Rates
  4. Bidding Wars and Price Declines

Goodbye Private Mortgage Insurance

A 20 percent-down guarantees that you won’t be paying any private mortgage insurance (PMI). Not paying between 0.5% and 1% a year for a mortgage insurance alone is a huge relief for your pockets.

These savings can be funneled to general repairs and maintenance your home might be needing in the future.

Monthly Payment for Less

Imagine buying a home with a price tag of $200,000. If you put at least 20% of that purchase price, which is $40,000 and take out a 30-year loan for the remaining $160,000 at 4.25%, your monthly payment will be $787.10.

Compared that with putting a downpayment of 3.5% or $7,000 and borrowing $193,000. For the same loan term and interest rate, you’ll be making $949.44 in monthly payments.

Less Borrowing, More Savings

The above calculations lead to this point: if you have borrow less, you’d pay for less in interest costs. For the mortgage with the 20% down payment, the total mortgage with interest that you’ll be paying is $283,357.38. The total mortgage with interest that you will be paying for the loan with the 3.5% down payment is $341,799.84.

We can connect you with a lender.»

The bigger the loan, the more costly it is to borrow. Which is why lenders put a higher rate on bigger loans, especially those that go beyond the conforming limit or jumbo loans. With a higher down payment and a lower amount to borrow, the lender can give you a better rate and lesser fees to open this loan.

For a Good Start

A higher down payment ensures that you have enough equity of 20% early on in your loan. This mitigates the risk of a negative equity position should housing prices go under as what happened during the housing collapse a decade ago.

Indeed, a big down payment ensures or increases the likelihood of you winning a multiple-bid war. A bid backed with 20% or even 30% off the purchase price is enough to get the seller’s attention.

Big for Less?

A large down payment serves to compensate some “bad” aspects of your loan like a bad credit score so it can still stand for approval by the lender.

Producing 20% of the purchase price is a lofty goal, an idea worthy to be considered if you think long term. However, no one is looking down on your ability to produce a little down payment. Just find ways to cut back on the other costs of your loan if you plan to make a small down payment.

We can help you find a suitable mortgage lender.»

3 Practical Ideas to Save for Your Down Payment

By

3 Practical Ideas to Save for Your Down Payment

Homebuyers sure are lucky these days; they can buy a home with as little to no down payment. Indeed, you can get an FHA loan with 3.5% down payment or a conventional mortgage under their special programs for first-timers.

Don’t let a down payment pose a hurdle to your homeownership, especially if you can save up for it. We have rounded up some practical ideas to help you save for your down payment.

Start looking for mortgage deals here.»

Before you start any savings plan, know your timeframe for buying a home and always start with a budget to work around.

Set a price range for a home you can comfortably afford to pay for the down payment and the monthly mortgage amortization and maintenance costs. Say, a home with a price tag of $200,000 can have a down payment of $7,000 if at 3.5%.

Tip 1: Power Save

Take a look at traditional and modern ways to store your hard-earned money.

  1. Open a savings account. Find a bank that offers a higher savings account rate to grow your money. But be wary of too-good-to-be-true rates because they might just turn out to be that. Same with credit unions. You can seek out those that offer competitive rates. Ask your friends, co-workers or family members of credit unions that they can recommend.
  2. Automate your savings. Often the best way to save is to do it fast enough. There are finance apps that do the saving for you; they analyze your spending habits, how much you can afford to set aside for savings, and automatically transfer those amounts into a checking account. There are minimal costs in maintaining these apps.
  3. Take on a money challenge. A good example is the 52-week challenge, which in its simplest form can rack up $1,378 or in another increment up to almost $7,000 in a year. You can tweak your savings timetable, starting with the bigger amounts during the start of the year and working towards the lower amounts as the year ends.

Shop and compare loans and rates.»

Tip 2: Automate (Your Bills)

If you can automate your savings, you surely can automate your bills payment. Enroll your biller, e.g. utility, insurance, credit card, and more in your debit card for auto-payment every month.

This not only spares you from withdrawing cash and spending it elsewhere, it makes you current on your accounts. Ultimately, you won’t incur late fees or accumulated charges especially on credit cards. It would be a plus on your credit report, too.

Tip 3: Invest

It certainly pays to have funds for investment, aside from the money you safely put in your deposit accounts. If you’re new to investing, research first about mutual funds, bonds, instruments or any type of investment that can be for short-term or long-term as you deem.

Remember, you won’t get rich overnight by investing and there is a risk to lose money as there is a chance to gain some. That’s why it’s important to understand the risks and gains in investing.

Final thought: Cut down on any unnecessary expense and where else you can save for now. Nothing beats the joy of owning a home that you have worked hard for.

Let’s help you find a lender.»

No Income Verification Loans: Another Name for Stated Income Loans

By

No Income Verification Loans- Another Name for Stated Income Loans

With mortgage rates fluctuating, alternative mortgage products are bound to emerge as they once flourished before the housing crisis. No income verification loans or stated income loans have been one of those mortgage products. While not as prevalent as they were then, today’s stated income loans remain an option for those who can’t document their income the traditional way.

Do you need a stated income loan?»

No Income Verification Loans

With stated income loans, borrowers don’t have to go through the process of income verification using standard documentation, primarily pay stubs, tax returns, and Form W-2s.

  1. Not all borrowers are salaried employees receiving paychecks twice a month; some of them work on a commission basis while others run their own businesses or earn from their investment portfolios.
  2. Tax returns do not accurately reflect one’s income. Business owners often deduct some expenses to reduce their taxable income.

What stated income loans entail is less reliance on those documents to verify a borrower’s income. Your employment will have to be verified but lenders will use other forms to prove that your income meets their standards.

For example, they may require a proof of self-employment from a certified public accountant. Lenders may also require two years’ worth of federal tax returns and transcripts to show you’ve been paying taxes.

No Income Verification Loan Requirements

With fewer documents to work on, lenders have to make sure the loan is sound and the borrower able to repay. It wasn’t long ago when stated income loans were called liar loans because some borrowers or their loan officers inflated their income and asset holdings to get larger loans for pricier homes. These risky transactions contributed to the subprime mortgage crisis of 2007.

Find a suitable mortgage here.»

Against this backdrop, no income verification loan lenders require that the borrower put up at least 30% equity. Some lenders may require 40% down payment as borrowers of stated income loans are understood to have a high income, albeit hard to document.

Another primary requirement is a stable work history because lenders have to verify your employment, after all. Lenders differ by their definition of a “stable” employment record but it could be no glaring employment gaps and job switching all too often.

Moreover, you must possess a high credit score, impeccable even. People with good credit scores have a dependable payment history.

Lenders may require other documents such as rental history and bank statements.

No income verification loans are clearly not for everyone, they target a specific group of homebuyers who can afford to take out mortgages with bigger down payments and higher standards in terms of credit and assets.

If you are looking for a low down payment loan, click this button.»

Homebuying 101: Preparing the Paperwork

By

homebuying-101-preparing-the-paperwork

When you talk about a loan application, you get babbled. Different lenders require all sorts of documents needed to begin the loan process.

While one lender may differ from another in terms of verification documents, it helps to know that there are certain papers that are common to each. Preparing these ahead will not just save you time, but money and effort.

 

Gather these necessary documents before you apply for a loan:

Proofs of Income

Most lenders will require the most recent W-2 form together with your tax statements. However, some may ask for W-2 copies of the most recent two years.

If you are receiving a paycheck from your company, a W-2 will show how much your income is and the portion of it that went to tax. If you have a business and are employed at the same time, expect to provide copies of your 1099. This will report the different incomes you receive in a year other than your salary. More importantly, these verify the  earnings that you have declared upon applying for a loan and reflects your income trends. These figures will then be calculated by lenders to determine if they should approve the loan or not.

Don’t to go through paperwork? talk to a lender about your stated income loan options»

Federal Tax Returns

The recent two years of your tax returns will also be reviewed. You will have to expect to include all the schedules and K-1’s if it applies. This is important for self-employed borrowers who cannot provide W-2s.

In a stated income loan, it may not be required that you provide proof of your income such a tax return. Providing these, though, if you have them, will strongly suggest to a lender that you are ready to have your income and assets be examined. This may likely increase your chances of approval especially if they find out that you have more than enough reserves.

Credit Reports

Most loans require that you submit a copy of your credit report. Even if lenders may perform their own credit checks and each one has its own minimum credit score requirement, it is beneficial to know your credit score in advance.

By doing so, you will be able to detect any areas that need credit repair before your lender scrutinizes it. You may need to pay off some missed payments, get current on your existing loans, or trace up some fraudulent transactions done under your name. These extra steps may mean the difference once your loan provider takes a look at your credit report.

Anyone applying for a stated income loan needs to have stellar credit scores. If you provide one that’s already blemish-free (thank yourself for doing the necessary repairs in advance!), these lenders will likely approve your application.

Bank Statements

Your lender would want to know your reserves. Expect them to ask for a copy of your bank statements; the most recent and, possibly your old ones too.

Prepare copies of savings accounts, retirement accounts and deposit transactions among others. This will not only show how much money you have in the bank. It can also prove that your down payment was not a gift from non-borrowing household members.

Click Here to Start Your Stated Income Loan Process»

List of Other Assets

Aside from your bank statements, you should prepare a list of your other assets as well.

This will serve as evidence that you have enough savings and investments to keep you afloat after paying for any down payment, monthly premiums and closing costs. QM or stated income loans alike, the more money you have, the better chances that a lender will be willing to lend. If you will be able to provide these documents, you will have proof that you have other sources of income aside from your loan. If you are an investor with a huge asset, this will work to your advantage.

 

Final Words

True, paperwork takes so much time to do and, sometimes, it gets frustrating. It may sound silly, but these records will help not just the lenders but you in many ways. For one, it helps determine if you would be able to afford the loan or otherwise.

QM lenders may require you more documents but it is for sure that the ones listed above will be part of it. In a stated income loan, however, an income verification is not necessary as this loan is what it is known for. You will only have to declare how much your income is and will be taken for your word. Although submitting this document may increase your chances for a loan approval but it is never required. The one most important thing you will have to work on is to make your credit report as excellent as possible. This, together with a large down payment and a huge cash reserve, will have loan providers consider your application.

Shop for lenders and ask each for a rundown of all the documents they need. Take them down and compare them. See which ones are easier to comply and which works for you best. Start shopping for lenders today!

Click Here to get matched with a Lender»

You Can Get a Mortgage with Little to No Down Payment

By

You Can Get a Mortgage with Little to No Down PaymentIf you took a survey of adults that still lived with their parents, you would probably find that a majority of them do so because of the lack of savings they possess. Without a down payment, they assume that they cannot purchase a home and they don’t want to waste money on rent, so they remain content on their parent’s couch. The good news is that there are plenty of ways to purchase a home with little to no down payment – you just have to know your options!

20 Percent is not the Only Answer

We are all trained to think that without a 20 percent down payment, a house purchase is not possible. In reality, you can get a mortgage with no down payment with several programs, including the VA and USDA loan program, but you can even get conventional financing with as little as 3% down. The kicker is that you will pay Private Mortgage Insurance in order to give the lender a guarantee that they will not lose out on hundreds of thousands of dollars if you default on your loan. You do not have to stick with conventional financing, though; there are many other options out there that do not charge PMI and do not require large down payments!

VA Loans

If you are a veteran or are actively serving right now, you likely have VA benefits to use. These entitlement benefits enable you to purchase a home with no down payment. In fact, the qualifying guidelines for this program are so flexible, that it would be hard not to qualify. Typically, you need a credit score that averages around 620, although some lenders will go as low as 580; 12-months of on-time rent payments or an alternative credit line, such as insurance or utility payments; and adequate discretionary income which varies by the area that you live. The VA actually focuses more on your discretionary income than your debt ratio – they have a set amount of money that each family size needs to have each month in order to qualify.

VA loan eligible? Find a Lender»

USDA Loans

USDA loans offer the chance for anyone, not just veterans as the VA loans require, to purchase a home with no down payment. The kicker with this loan type is that the home must be located in a rural area, as determined by the USDA, which you can find on their website. In addition, your maximum qualifying income cannot exceed the USDA guidelines, as the program was created for borrowers that have low to middle-of-the-road income. But chances are, if you are living on your parent’s couch, you do not make too much money to qualify for the USDA loan in your area. To qualify for the USDA loan with no down payment, you must have a credit score around 620 (some lenders go as low as 580 for this program too); be an upstanding citizen; and have debt ratios around 29 percent on the front-end and 41 percent on the back-end.

FHA Loans

Last, but certainly not least, are the FHA loans. This program does require a down payment, but it is just 3.5% of the purchase price of the home. So, for example, if you found a home that was not within the USDA rural boundaries and its purchase price was $150,000, you would have to put down $5,250 on the home. The good news is that the money does not have to come just from you – a gift from a family member, employer, or charitable organization can be used to make the down payment. As long as you can source the money and prove that it is not a loan, you can use it for a down payment. The requirements to meet the FHA guidelines are similar to those of the above two loans – your credit score should be around 620, but lower scores are sometimes accepted; your debt ratio should be around 31 percent on the front-end and 43 percent on the back-end; your employment history should be steady; and your income verifiable.

As you can see, there are a variety of ways to get a mortgage without a down payment. The 20 percent rule still applies if you want a conventional loan with no private mortgage insurance, but if you need alternative forms of financing, there are many options out there that are provided by a large number of lenders making it easy to get off your parent’s couch and into your own home!

Click Here to get matched with a Lender»

How does the Down Payment Vary for Stated Income Mortgages

By

How does the Down Payment Vary for Stated Income Mortgages-STATED-INCOME.COMStated income loans have a variety of requirements that differ from standard conventional loans. Because these loans remain on the portfolio of the individual bank, every lender has their own requirements. In general, you need to have excellent credit, at least 12 months of reserves, and a high down payment. Just how high does the down payment need to be? It depends on the factors of your loan.

Good Credit Helps

In order to be considered for a stated income loan, you need good credit, plain and simple. But the higher your credit score is, the more lenient a lender may get with the down payment. Most lenders look not only at your score, but at the payment history over the last 24 months as well. If you have no late housing or installment payments, your down payment requirements would likely be lower than someone that had a late payment or two reporting in the last two years. The down payment is your investment or your “skin in the game”. If you show that you are a low risk for the lender because you make your payments on time, the required investment may be lower.

Click here for the latest rates»

Typical Down Payment Requirements

Good credit aside, most lenders require no less than 30 percent down for stated income loans. On a $200,000 loan, this means you have to put down at least $60,000 rather than the $40,000 that would be required on a conventional loan with no private mortgage insurance. It is important to know these down payment requirements up front as it could take you quite a bit of time to save up that kind of money and can help guide you in terms of the price range you shop in when looking for a home. In general, however, the better your credit score and history, the lower the down payment will be required. The more risk you provide the lender with, the more money they will require you to invest.

Keep in mind that the lender is still going to verify your employment with or without verifying your income, which helps to give him reassurance that you are legitimately making the money you state you make and that you prove with your bank statements. If you are self-employed, they can verify that your business exists as well as verify the cash flow on your bank statements. The higher the down payment you pledge to make, however, the more relaxed the lender will get with the risk you pose without verifying your income the standard way.

Click Here to get matched with a Lender»