Stated Income

The stated income mortgage program is a form of mortgage loan program that is part of a family of "low-doc" and "no-doc" loans, meaning little or no documentation is required for the loan. A conventional mortgage loan requires lots of documentation or "full-doc" including a list of all creditors, last two or three paycheck stubs, W-2s and returns on income tax for the past two years, bank statements going back two months, and legal documents in case of bankruptcy or family misadventure.  Prospective home purchasers who cannot show income but have the income and good credit history to obtain a mortgage loan are prime candidates for exercising stated income home loans. To qualify for this loan, the borrower only needs to state income for the last two years or more and have good credit.

Good contenders for a stated income mortgage loan include small business owners, salespeople who work on commission and independent contractors.  A stated income mortgage loan could also be beneficial to those who’ve been out of work and are starting new jobs.  Or, simply for those who don’t wish to provide the income documentation required for a conventional mortgage loan.  It’s difficult to obtain a conventional mortgage if you’ve just started a new job after a year or two of being unemployed.  A stated income mortgage loan on the other hand, makes the process possible and gives you the opportunity to acquire a mortgage when you would of otherwise been denied due to lack of steady employment.  The advantage of a stated income mortgage loan is your lender takes your income at your word.  At the very most, lenders may verify that the borrower is employed and/or that their reported income is realistic based on industry averages for their particular occupation.  The mortgage loan rate for this type of program is usually just an eighth to a quarter point higher than for conventional loans.