A Stated Income Loan is a loan where the lender does not require standard proof of income during the underwriting process. In today’s current lending enviroment, a lender will only fund these loans if the borrower has significant compensating factors. These factors include, but are not limited to, excellent credit, sufficent equity, and assets that reflect the amount of money stated on the loan application. Some may ask, why would a lender fund a loan where the borrower is not able to prove sufficient income to qualify for a loan? There are many answers to this question. Some borrowers are self employed and control a great deal of assets. However, they may be entitled to a significant number of write offs that decrease the amount of income reported on their tax returns. In other cases, a borrwer may not be able to prove their income but they have significant assets at their disposal that they could sell them in order to make enough income to be a good credit risk for a mortgage. Alternatively, a borrower could show enough assets to qualify for a loan but, because of the complexity of thier financial situation, they would prefer not to go through the process of doing so.

Regardless of the individual’s situation, a Stated Income Loan is not way for someone to buy a home they cannot afford. However, there are many buyers who would prefer not to show their income who are excellent credit risks. That is why forward-looking lenders still provide these loans and that is why we are here to help.

Please contact Louis Stathakis for more information regarding Stated Income Loans or for any other mortgage questions you might have.

619-252-7588 direct

lstathakis@pcmort.com