Stated income loan programs were first introduced in the early 200s primarily for the “self-employed” borrower who had trouble getting clear documentation or an accurate representation of what they actually make. Later on in 2007 stated income loans were given to just about anyone with decent credit. They became highly abused and ultimately were the main cause of the mortgage and Real Estate crash that prompted the recession in 2007.
Documenting self-employment income is much more difficult whereas an employee can furnish pay stubs and W2s that are quite clear. The Stated Income loan still has a place and a great use for a responsible self employed individual with a proven track record.
STATED INCOME MORTGAGE LOAN BENEFITS
Main benefits of the Stated Income Loans (ALT Income Loans) are that there is no need to document regular monthly income pay stubs for W-2
- The Alt-Option Income Program allows borrowers with unique employment situations that typically do not meet the guidelines for traditional mortgage programs access to financing. (Program Highlights)
- The Alt -Option Asset Inclusion Program allows borrowers to factor in alternative sources such as assets for verification of their ability to repay the loan. (Program Highlights)
- The Alt-Option Access Program allows borrowers with recent significant derogatory credit events that typically do not meet the guidelines for traditional mortgage programs access to financing. (Program Highlights)
- The Alt -Option Ratio Program allows borrowers with debt-to-income ratios that typically do not meet the guidelines for traditional mortgage programs access to financing. (Program Highlights)
The idea of a stated income loan was amazing the innovative when it first came out. Since then they have been abused and the topic of a lot of fraud and bad loans that were written in the mid 2000s.
The original purpose of the stated income loan was to help honest good credit worthy individuals get loans when they couldn’t exactly document their income. The good example of this is somebody who’s self-employed and makes very good living in their business with a consistent income over several years.
Maybe you could identify with us if you are also a business owner yourself?
It can often be very very difficult for somebody who self-employed or on the business to document consistent monthly income on a regular basis the way that unemployed person gets W-2s would pay stubs.
When you have regular pay stubs and W-2 it’s pretty simple to figure out what you can qualify for what you can go ahead and for monthly comes to home loan or mortgage or any other loan for that matter.
So the main problem for good credit worthy self employed people if they just cannot find the bank will give the money because of inability to document consistent monthly income right.
This is where the stated loan program comes in very very handy for the right qualified individual. It’s mainly meant for borrowers that have a great credit track record, where they have reserves, and are generally deemed a good risk for banks to take by giving money to.
With our brand-new just released portfolio stated phone program we can help self-employed borrowers get jumbo loans so that they could buy the home of the dreams finance a business and money many other uses.
Although the rules and guidelines change for this program often important that you know the basics.
You can learn more about the new stated income loan programs for California Mortgages or just call and ask.