Mortgage Assistance For The Self Employed: Stated Home Loans
Stated home loans, also referred to as stated income loans or “no doc” loans, are making a comeback as lenders look to boost business in home mortgages. Lenders claim that these loans are a different breed from those associated with the market collapse of 2008 (referred to as “liars loans”) and they are making sure to put in the extra due diligence required to satisfy tighter lending policies.
Stated income loans provide an alternative form of financing for the self employed who are unable to meet the strict guidelines required by conventional lenders. This is largely due to the lower reported incomes of the self employed resulting from tax write offs and deductions at the end of the year. Stated home loans are a useful, flexible, and helpful tool that when used responsibly will allow those that fall outside the conventional lending standards to receive a mortgage loan.
The specific required to verify self-employment today can vary greatly between lenders and the type of loan that is being applied for. Those individuals looking to purchase new homes with conventional or FHA mortgage loans are required to submit copies of tax returns for the last two years as well as execute a 4506T, enabling lenders to verify them In order to qualify, the net, adjusted gross income for the last two years is averaged unless the most recent year shows declining income, in which case the lower number will be used. The new debt-to-income ratio (DTI) cannot exceed 50 percent of the borrower’s monthly income.
For further information regarding stated home loans contact the specialists at HML Investments.