STATED INCOME LOANS-

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Stated Income Loans in 2016:

Yes, They Are Coming BackJust a few years ago, stated income loans werevery popular and there were plenty of statedincome lenders who had flexible guidelines andlow stated income rates.



Then the credit crisis hit and lenders beganpulling their stated income mortgage programs.As lenders began to stop offering stated incomeloans, many small business owners and othersbegan to have problems getting loans becausethey have unique situations that the statedincome loan programs serve.



Stated income loans are popular with many people,but here are just a few of the types of borrowers whomay consider getting a stated income loan:

Self employed people who own a small business

Highly commissioned people who may have a low

base salary but make most of their income on

commission

People who can’t document at least 2 years of

income at their current income levels

People who make plenty of money but don’t want to

disclose their income for one reason or another



In 2016: Guidelines Vary By LenderWith stated loans starting to be offered again fromsome lenders in 2016, these people (and others) arestarting to be able to get loans again which will helpthem refinance their current house or buy a newhouse with a mortgage loan. Stated income guidelinesare never really the same between lenders. Eachlender will develop a stated income product and thencreate guidelines around the product. Stated incomeprograms will vary by lender and will usually developnicknames like “no doc”, “low doc”, “SISA” and manymore.



Stated Income LendersNot all lenders offer stated income loan programs, andmost loan officers know that having a stated incomelender can make all the difference when it comes tohelping a borrower get into a home who is a smallbusiness owner. Stated income lenders are mostlysmaller lenders at this point who are coming up withcreative solutions and stated income products withflexible guidelines so that they can attract businessthat is good business and not business that they don’treally want.



These stated income loan programs are allgoing to be different based on guidelinesset by the lender. For example, a NINA loanat Lender A will probably have a differentguideline set than a NINA at Lender B. Thisis why it is so important when considering astated income loan, be sure to shoparound.



Stated Income Interest Rates

Stated income interest rates will also vary bylender. Expect the interest rate for a state incomeloan to be higher than an FHA loan interest rate,but nothing that is out of the market. Statedincome loans carry a premium, but they have tobe competitive. Expect a couple of percentagepoints higher than a FHA loan and you should beclose.



FrequentlyAsked

Questions



What is a SIVA loan?

SIVA stands for Stated Income VerifiedAsset loan. This type of loan allows you tostate your gross monthly income andrequires the lender to verify assets –usually done by you providing bankstatements or brokerage statements orsome type of document that verifies thatyou have the assets you claim to have onthe loan application.



What is a SISA loan?

SISA stands for Stated Income StatedAssets. It means that the loan guidelinesallow you to state your income andassets – meaning you will not have toverify either assets or income.



What is a No Doc loan?

Although guidelines will vary by lender,a true “no doc” loan program is whereyou don’t have to verify anything otherthan your citizenship.



Can I be declined if I state my income too high?

Yes. It is possible to have your loan declined forthe reason that your stated income doesn’tmatch your job description and title. If you are awaitress that declares you make 50,000 permonth, that may be an example where anUnderwriter would look twice at your file.Underwriters have resources to see the range ofpay based on title and job description – andwhile not always accurate, they are typically inthe ballpark.



Is there a minimum credit score?

Usually, yes. Minimum credit scorerequirements will vary by lender andprogram. There is no one “minimumcredit scores for stated income loansare 620” kind of rule – the minimumswill vary by lender.



Is there a minimum down paymentrequired?

Usually, yes. Minimum down paymentrequirements will vary by lender andprogram. The general rule of thumb withstated income programs is that they willrequire a higher down payment thanconventional loans – but it will vary bylender.



Getting The Best Deal

Because not every lender does stated income loansand the lenders that do actually “do” stated incomeloans typically only offer a handful of products –getting a loan will require you to shop around a little bit.In 2016, it may be harder to actually find a lender whohas the right loan for your situation than it is to find 3lenders who have the same loan and you just want toget the best rate and fees. Shopping for a lender is easyif you start here – simply submit your information andwe will go to work matching you up with a lender whocan possibly help you. Getting matched with a lender isfree, easy and only takes a couple of minutes.



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C L I C K H E R E



Justin McHood is Americas MortgageCommentator and has been providing

Mortgage commentary for over 10 years.

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