No Doc Stated Income Loans
Not everyone can meet the bank's strict income verification criteria. For example those who are self-employed and small business owners lack the needed documentation to support their true annual income. As a result they have difficulty being approved for loans and mortgages. Mortgage lenders consequently have begun to offer stated income loan products to help these individuals get over this hurdle.
If you want to borrow against the equity in your home you may be eligible for a stated income line of credit. The lender will not require you to provide proof of your income, but instead will take your word for it. Then, once approved, they account will be administered like any other.
It is a common business objective to strive to keep taxable income as low as possible by deducting eligible expenses. This is at odds with lenders who like to see as big an income as possible. They more income the easier it is for the borrower to service their total debt. Stated income credit products solve this.
The banker does not request traditional documentation proving income. In its place they insist upon strong credit worthiness. The higher the FICO score the better. They put this criteria in place to offset the greater risk they are undertaking by not verifying income.
You may find that the interest rates on these types of loans tend to be higher than on their traditional counterparts. The usual fee schedule can be higher as well. Again to offset the additional risk.
Some financial institutions will also put criteria on how long the applicant needs to have been in business. The may also include other factors such as payment shock, where the new payment can not be more than fifteen percent of your existing shelter payment. Essentially, because they are opening themselves up to additional risk by not verifying income, they endeavor to ensure that you are as strong as possible in all other areas of the approval criteria.
So there are options out there if you are self employed for getting home equity lines of credit. Be sure to contact your local mortgage lender and see if they offer stated income products. If not you can search online for one who does are consult with a mortgage broker. Regardless of your choice, just be aware there are options.
If you want to borrow against the equity in your home you may be eligible for a stated income line of credit. The lender will not require you to provide proof of your income, but instead will take your word for it. Then, once approved, they account will be administered like any other.
It is a common business objective to strive to keep taxable income as low as possible by deducting eligible expenses. This is at odds with lenders who like to see as big an income as possible. They more income the easier it is for the borrower to service their total debt. Stated income credit products solve this.
The banker does not request traditional documentation proving income. In its place they insist upon strong credit worthiness. The higher the FICO score the better. They put this criteria in place to offset the greater risk they are undertaking by not verifying income.
You may find that the interest rates on these types of loans tend to be higher than on their traditional counterparts. The usual fee schedule can be higher as well. Again to offset the additional risk.
Some financial institutions will also put criteria on how long the applicant needs to have been in business. The may also include other factors such as payment shock, where the new payment can not be more than fifteen percent of your existing shelter payment. Essentially, because they are opening themselves up to additional risk by not verifying income, they endeavor to ensure that you are as strong as possible in all other areas of the approval criteria.
So there are options out there if you are self employed for getting home equity lines of credit. Be sure to contact your local mortgage lender and see if they offer stated income products. If not you can search online for one who does are consult with a mortgage broker. Regardless of your choice, just be aware there are options.
About the Author:
If you are self employed, get more information on the home equity line of credit stated income at Pat's mortgage website.
posted by Credit Counseling at
9:40 AM
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