You got a call informing you that your bank has finally approved your stated income loan application.
Congratulations! You will finally be able to buy a home of your own.
But before you sign on the dotted line, make sure you have checked on one very important thing – the affordability of your mortgage.
Can you afford your mortgage?
Okay, your lender has told you that your debt-to-income ratio qualifies for a mortgage. The question is, can you truly afford the loan in real life?
When the lender reviews your credit, they won’t be able to see the entirety of your spendings. In it, they will only see bills from your credit card or auto loan and even your student loan. However, they won’t be able to check how much you spend on your grocery and gas, your utilities and other insurances.
Your credit may not be the total reflection of the kind of spending habits you have. It is only you who can truly assess if you will be able to make consistent, full and on-time payments. You have to factor in all the things that may affect the affordability of your home loan.Get Matched with a Lender, Click Here.
The law requires that your affordability is determined.
Your lender is responsible for determining your affordability. This is the law. They have to do so with due diligence by scrutinizing your income and debts.
Not only do they want to make sure that you are willing and able to pay their money back. The truth is they have to do this because if they fail to do so, they may be penalized. Before they will even provide the loan, they will ask you to provide all the necessary documents for them to check your income and debts.
While there are loans that do not require any documents for verification, they are deemed too risky. Stated income loans may be non-conventional but it still requires adequate proof of affordability before it can be originated.Connect with a Lender, Click Here.
Rules are rules.
Non-qualified loans do not mean not having any rules to follow. One particular guideline is the Ability to Repay Rules.
With these rules, there is a stronger sense of accountability, both on you and on the lenders part. Gone are the days where you just declare to a lender that you can afford the loan and they take your word for it. You have to show adequate proof that you truly can repay the borrowed money. Stated income lenders will set their requirements, establish that a person can afford a home financing and be accountable for it.
Non-qualified loans like a stated income loan do not work like QMs, where you can sue your lender when you are given an unreasonably higher rate or provided with unattractive terms. You have to understand how your loan works. Moreover, you have to establish that the affordability of your mortgage is well within your means.
Begin shopping for lenders. Make sure you are able to make comparisons between offers. This will help you find a loan that is truly within your budget. Make sure you have all the documentation needed.Click to See the Latest Mortgage Rates»