Stated Income Home Loans
The lending regulations following the financial crisis of 2008 have been over tightened. People who are looking to purchase a home are met with adversity from banks offering conventional loan programs. In turn, non bank lenders are gaining more allure as people are continuously turned down by institutional banks in pursuit of a mortgage loan. The mortgage market has seen a rise in stated income home loans, and this is a good thing. Although the tightening of credit is meant to deter irresponsible lending, the increased regulations and red tape makes it difficult for the demand to be met.
Non bank lenders, in an effort to gain new clients, have reintroduced the stated income home loans. These types of loans are not identical to the ones that contributed to the mortgage meltdown. The stated income home loans on the market today are integrated with higher standards. The stated income loan is simply a loan type which allows the borrower to submit a document stating their monthly income with the understanding that the lender will not verify that income. During the run up of the housing market meltdown in 2007, state income loans were used as an unscrupulous method of lending by bankers who took advantage of desperate, uneducated borrowers. In order to deter similar practices from taking place, stated income loans on the market today require borrowers to have a credit score of at least 680 and a down payment of at least 25%. In addition, while the income amount will not be verified, the source of income will be. If you are a borrower who’s tax documents do not properly reflect your income, a stated income home loan may be the right option for you.
Contact the specialists at HML Investments today for more information about stated income home loans.