Stated Income loan mortgages in Tennessee, Missouri, Indiana,
Colorado, Mississippi, Alabama and Florida.
Some home loans do not require proof of income, or proof money is available for closing costs, the down payment on purchases, etc.
They have many names – Stated Income, No Income, etc. Frankly – some people are in situations where it is difficult to verify their income. These loans are perfect for people who are self employed, people who write off a lot of expenses, etc. etc. In some cases – we do not even have to state the borrowers are working.
These types of loans are riskier to banks so they charge a premium for this increased risk. This ‘premium’ is generally half to one percent above the rate the borrowers would otherwise get. In rare cases there is no premium at all.
When bank underwriters review a file for approval they look primarily at four ‘pillars’ if you will - to support the decision to lend. Those ‘pillars’ are credit, income, collateral (the property), and assets. What is being done with this type of loan is one or two of the pillars are being removed, so the others have to support the decision. Credit becomes much more important, and the appraisal (and equity in the property) becomes more important.
The stated income home loans tend to be simple and quick, which is another reason people use them.