Now You See Them, Now You Don t: Stated Income Loans Over the last few months, we at First Central Mortgage Funding, have received many requests to explain stated income loans, what they are and how they work. We have also been asked if these types of loans are still available and to bring clarity to the current state of affairs regarding stated income loans. Generally stated income loans are a type of mortgage in which the borrower is not required to verify the their personal or business income to the lender through documentation such as pay stubs, income tax returns, or W-2 forms. In unorthodox stated income loans, borrowers are only asked to state their income and they make a good faith statement. When Would You Benefit from Stated Income Loans? Self-employed borrowers are ideal candidates for stated income loans. Of course those who might have difficulty organizing income documentation. Stated income loans have been approved to clients with a range of credit histories, which includes subprime borrowers. Unfortunately the lack of verification often makes these loans scam targets. First Central Mortgage Funding is in favour of loans that fill financial needs including situations where normal loan standards wouldn t be approved. The rule of thumb is that a customer s mortgage and other loans should not add up to more than 45% of a person s income. This would appear like the sensible course of action for a person who now owns a home. Conversely, an investor may have many properties and for each one may receive just a small amount more than their loan payments per property, but end up with $320,000 in income considered disposable. Nonetheless, non-stated income loans would decline this individual since their debt to income ratio does not line up. Self-employed businessmen who borrow, and who have a fully documented loan would include the borrower s debt into their own debt for their income calculation. Stated income loans can also assist borrowers when loans with complete documentation normally don t think of the source of income as having reliability or stability. Also a properly documented loan does not consider potential future income increases. Are Stated Income Loans Available at This Time? First Central Mortgage Funding recalls that in 2008 there was potential for a couple with a five-one ARM on their residence adjusting in two years. If they wished to refinance into a 30-year fixed-rate loan while walking away from two investment properties they wouldn t be able to refinance in their own name. They could refinance in the wife s name only, but they would have to be stated-income loans if she was a student or unemployed. This couple could have shown a healthy amount of cash in the bank. Suppose the loan amount is about $800,000. Could this couple have gotten a decent rate at that time? Well, yes, since at that time stated-income loans and no-verification loans were available at reasonable terms. In 2008 this couple would have been able to find stated income loans along with verified assets at any number of small savings-and-loans.
First Central Mortgage Funding Inc is North York-based company (Ontario, Canada) with a phone number 4164848882. Our data show that the company is located at the address: 6021 Yonge St Ste 409. The company has a web site: www.firstcentralmortgagefunding.com.
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