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Stated Income Loans in 2016: Yes, They Are Coming Back
Just a few years ago, stated income loans were very popular and there were plenty of stated income lenders who had flexible guidelines and low stated income rates.
Then the credit crisis hit and lenders began pulling their stated income mortgage programs. As lenders began to stop offering stated income loans, many small business owners and others began to have problems getting loans because they have unique situations that the stated income loan programs serve.
Stated income loans are popular with many people, but here are just a few of the types of borrowers who may consider getting a stated income loan:
Self employed people who own a small business
Highly commissioned people who may have a low base salary but make most of their income on commission
People who can’t document at least 2 years of income at their current income levels
People who make plenty of money but don’t want to disclose their income for one reason or another
In 2016: Guidelines Vary By Lender
With stated loans starting to be offered again from some lenders in 2016, these people (and others) are starting to be able to get loans again which will help them refinance their current house or buy a new house with a mortgage loan. Stated income guidelines are never really the same between lenders. Each lender will develop a stated income product and then create guidelines around the product. Stated income programs will vary by lender and will usually develop nicknames like “no doc”, “low doc”, “SISA” and many more.
Stated Income Lenders
Not all lenders offer stated income loan programs, and most loan officers know that having a stated income lender can make all the difference when it comes to helping a borrower get into a home who is a small business owner. Stated income lenders are mostly smaller lenders at this point who are coming up with creative solutions and stated income products with flexible guidelines so that they can attract business that is good business and not business that they don’t really want.
These stated income loan programs are all going to be different based on guidelines set by the lender. For example, a NINA loan at Lender A will probably have a different guideline set than a NINA at Lender B. This is why it is so important when considering a stated income loan, be sure to shop around.
Stated Income Interest Rates
Stated income interest rates will also vary by lender. Expect the interest rate for a state income loan to be higher than an FHA loan interest rate, but nothing that is out of the market. Stated income loans carry a premium, but they have to be competitive. Expect a couple of percentage points higher than a FHA loan and you should be close.