Stated Income Loan Applications are Easier Than You Think

When you realize a traditional mortgage isn’t the right fit for you, considering non-QM loans can be daunting. If you’re not familiar with them, it may seem overwhelming, but it doesn’t need to be. Actually, applying for a stated income loan is simpler than almost any other application.

If you want to talk with one of our loan officers about applying for a stated income loan, reach out to us any time. In the meantime, keep reading to learn more about shy applying for a stated income loan is simpler than you may have thought.

Understanding Stated Income Loans

First, make sure you understand what a stated income loan is. Stated income loans, also sometimes referred to as “no-doc” or “low-doc” loans, allow borrowers to declare their income without the traditional requirement of extensive documentation. Instead of providing tax returns, W-2s, or pay stubs, borrowers can state their income, and we can use alternative methods to verify your ability to repay the loan.

Simplicity of the Application Process

Because we’re not looking at your tax documents and pay stubs, the application process is pretty simple.

Minimal Documentation

One of the main reasons the stated income home loan application process is simpler is the minimal documentation required. Traditional loans typically demand extensive proof of income, including multiple years of tax returns, pay stubs, and detailed employment history. Stated income loans, on the other hand, require borrowers to declare their income, which significantly reduces the paperwork burden. This is particularly beneficial if you are a self-employed individual who has a complex financial situation or fluctuating income.

Rather than your tax documents, here’s what we might use to approve your loan application:

• Bank Statements: Providing several months of bank statements helps us understand your cash flow and spending habits.
• Business Financials: For self-employed borrowers, profit and loss statements or business bank account details can demonstrate financial stability. We can also look at contracts that show your expected future income.
• Asset Documentation: Savings, investment accounts, or other significant assets can also be used to prove your financial stability.

Faster Approval Process

The approval process for a stated income loan tends to be faster than other loans because it is so simplified. Traditional loans can take weeks or even months to process due to the extensive verification required. Stated income loans, with their reduced documentation requirements, can often be processed in a matter of days.

Common Sense Underwriting

In our approval process for stated income loans, we have returned to something called common sense underwriting. Common sense underwriting looks beyond the rigid guidelines of traditional lending. Instead of focusing solely on your income, DTI, and credit score, we consider the overall financial picture of the borrower. This includes examining bank statements, assets, and overall financial health. By taking a more comprehensive approach, we can make a more accurate and informed decision about your eligibility.

This is a relief, and a breath of fresh air for many of our clients who can certainly afford to invest in real estate but can’t qualify in the traditional avenues. While income is an important factor, our common sense underwriting process also heavily weighs creditworthiness and assets. Borrowers with strong credit scores and substantial assets tend to qualify for what they want, even if their income documentation is unconventional.

We know that our some of our applicants’ tax documents do not accurately reflect their income. For instance, self-employed individuals often have substantial write-offs that reduce their taxable income, but don’t necessarily reflect their actual cash flow. By using stated income and alternative documentation, we can better gauge your realistic income and financial capabilities.

We are experts in finding creative solutions for applicants who don’t fit the qualifications for a conventional mortgage. Contact us any time. “I’ve helped hundreds of self-employed applicants buy their dream homes when they thought they couldn’t qualify for a mortgage because they didn’t have the W-2 to prove their income. I’d love to show you what we can do for you.” –Jackie Barikhan