What is a Stated Income Loan?

One of the most commonly asked about mortgage loans is the stated income loan. The popular Stated Income mortgage also known as No Income Verification Loan (NIV) – requires just that! No W2’s, no pay stubs, no tax returns, and no IRS forms. Available to W-2 wage earners, 1099, Self Employed, and Retired. If you need financing but your income is difficult to prove or documention is hard to get then a Stated Income or No Income Verification loan may then be the answer for you.

Stated Income Mortgage Loans are the most commonly used and least expensive product in the reduced or no documentation suite of programs. A Stated Income Mortgage Loan is the perfect choice if you have verifiable employment, even if it is self employment, and assets.

Here are some general guidelines for a Stated Income Mortgage Loan:

Minimum credit score of 620 for most lenders
At least 5 credit accounts are required.
Bankruptcy and foreclosures must be discharged for 3 years with reestablished credit
Two years employment with same employer
5% minimum down payment is required from your own funds by most lenders

Stated Income programs allow you to purchase or refinance a single family, townhouse or condo.
There are “2” types of Stated Income loans for purchase or refinance that offer 100% financing explained below:

Stated Income Verified Assets Loan: (SIVA) – Loan approval is based on your stated income, credit history, and verified liquid assets. The Verified Assets should be consistent with the income claimed.

Stated Income Stated Assets Loan (SISA) – This loan features no assets being verified. You only state your income and state your assets on the application. This program carries a slightly higher rate because the assets are not verified. Now available on Home Equity Lines or Fixed Rate second mortgages.

There are also No Ratio Loans which are similar to the programs above except that no income information is provided or verified on the application.

Lenders usually look for a minimum of at least 2 years of self-employment history or at least employment history in the same field. Proof for minimum of 2 years employment history for self-employed borrowers may be things like a typed letter from a accountant/CPA on their company letterhead to get verification of the borrowers self employment. If an accountant is not available, two years of business license or confirmation from 3 disinterested business associates may be required. Your ability to qualify for the loan is based on the income stated on the application. The income must be related to your occupation.