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  As of September 2008, Stated Income loans have been all but discontinued. There are a few lenders still left, but they do require you to sign a document, a 4506, that allows the lender to check your income taxes to see if the income "stated" on your real estate loan application, matches your tax returns. If they are wildly different, it is fraud. Stated income loans with the "4506 form" may return in the future, but as of now they are no longer available. If they do return, they may or may not resemble the below description. Stated Income loans are now available for both the self employed and wage earners. This has become the premier loan choice of borrowers over the last several years due to soaring housing costs. Advantages: Limited or no verification of income. Your job and length of service will be verified, but not your income. Stated income also makes it easier to qualify for a loan since the income stated on the application can be flexible. This loan is a perfect fit for self employed loans, W2 salespeople, as well as non W2 salespeople. 100% financing is also available. Disadvantages: Higher rates and fees. What is a stated income loan? Tax returns, paystubs, 1099's and other documents related to proving income are not required. The lender will allow the borrower to "write in" and amount of income that will enable the borrower to qualify for the loan. The income must be "reasonable" for the line of work/industry that borrower(s), are in. What is reasonable? That is up to the lender to decide. If the income stated is out of line, than the lender may deny the loan. In this case, a no ratio or no income no asset loan may be an alternative to a stated income loan. If you are self employed, than there is much more flexibility on the reasonability of income. If your are a wage earner, there is less flexibility. 2 years in the same line of work is generally required. Before I submit a file to a lender, I call ahead and make sure the income has been reviewed for reasonableness. This addresses the issue upfront, and saves headaches later. If the income stated is percieved as excessive, than we have another loan option. The No Ratio Loan, click here to learn more about the No Ratio option or go to the main menu. When does a stated income apply? When income from tax returns, W-2's and paystubs doesn't document enough income to qualify for a specific loan amount. Types of stated income loans available Fixed rates, and a variety of adjustable rate programs with zero downpayment and interest only are available. There are hybrid fixed programs available as well. A hybrid fixed starts with a fixed period such as 2,3,5,7 or 10 years and than becomes adjustable for the rest of the life of the loan. 100% financing available Stated income is available with zero downpayment. More than likely you will need to obtain two separate loans, a first mortgage and a second mortgage to achieve 100% financing. For more information on 100% financing/zero downpayment option click here or go to the main menu and click on the 100% financing button. A single loan for 100% of the purchase price is also available. You may or may not be charged with private mortgage insurance (PMI) for this option but it is something to check into, especially in an increasing interest rate environment. Asset verification or no asset verification This is a detail that most often gets overlooked by many loan officers....not me! To obtain a more favorable interest rate, lenders want to make sure you have liquid reserves left in the bank or other asset before your loan closes. Reserves are emergency funds you can access at any time. The funds must be in your name. One month reserves is equal to 1 month's mortgage payment plus one month's worth of your annual property taxes and homeowners insurance or homeowners asociation (if the property is a condo or townhouse). Example: 1st mortgage - $2500.00 + 2nd mortgage $450.00 + property tax $350.00 + homeowners insurance $50.00 = $3300.00. $3300.00 equals one month or reserves. Usually to obtain a more favorable rate the lender wants 2-3 months reserves. The reserves must be in the bank or other asset and in your name for anywhere 30-90 days. The longer the funds have been in the bank, the better interest rate you may possibly obtain! A shortage of reserves or if the funds have not been in the bank long enough will result in a denial of your loan, or your loan will have to turn into a no asset verfication loan (see below). Asset verification may also apply to your closing costs as well (click on the closing costs button on main menu to learn more). Keep in mind, reserves are in addition to closing costs. You will need to demonstrate that you have these reserves left over after you have given you closing costs and downpayment (if one applies). Even though you have a zero downpayment loan there will be additional loan fees, closing costs (click on the closing costs button on main menu) that you will have to pay. These funds must also be proven to be yours and in your name. and in an asset of yours for 30-90 days. No asset verfication A stated income no asset verifcation loan is also available. Reserves may still be required but you don't have to prove where the money came from. It just has to be in the bank before escrow closes. The same also applies for the closing costs, you have to have them but no proof of where they came from. This added flexibility comes in the form of a higher interest rate, and more lender fees vs. the verified asset option. Call me for details or click here to apply on-line! Kevin Walton Cell: 805-276-1942
 Best Capital Funding - 6930 Owensmouth Ave. #102 - Canoga Park, CA 91303 Office Phone: (818) 887-2779 Fax: 800-506-0632 Cell Phone: 805-276-1942 Best Capital Funding.
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