How much do you know about stated income loans? If it's not much, read this short guide to learn the benefits of these loans and how to qualify.

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You may be no stranger to loans, but have you heard of stated income loans? These loans are great for non-traditional or self-employed earners and help you get the cash you need.

Stated income mortgages are home or business loans that do not require any verification or documentation of income for self-employed borrowers. This is a major plus, because individuals who are in traditional forms of employment must present proof of income to take out a loan, and are more likely to be rejected.

How much do you know about stated income loans? If it's not much, read this short guide to learn the benefits of these loans and how to qualify.

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Types of Stated Income Loans

Stated income loans are private money loan programs that allow the borrower to secure funding without needing to prove financial or tax records. There are a few different types of stated income loans.

Some types include purchase or refinance loans for primary residents, purchase or refinance loans for investment properties with 20-30% down, and verification of employment loans with written or verbal verification.

There are also "second-chance" stated income loans where the borrower has recently experienced bankruptcy, jumbo loans for $1-$5 million, and debt-service-coverage ratio loans where rental income determines the loan.

Many people take out this type of loan as a line of credit to buy another rental property or to use for renovations when flipping houses.

Another popular reason users take out these business loans is if investors don't want to spend all of their cash to buy a new property.

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How to Qualify for a Stated Income Loan

There are a few ways you can qualify for a stated income loan. Most importantly, you need proof of at least 2 years of self-employment.

You do not need to prove liability, W2 forms, or any other proof of income.

When you apply for a stated income loan, you need only to show your bank statements for the last two months, a business license, and proof that you are still in business.

The process is quick and worry-free.

To qualify for this loan, however, borrowers typically must have a large amount in their savings account and credit scores higher than 700.

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Benefits of a Stated Income Loan

For self-employed individuals, obtaining a stated income loan is the best option to keep your business up and running. There are many reasons and benefits of this kind of loan that make it a popular choice among business owners.

There are low amounts of paperwork required when applying for the loan. This makes the process hassle-free.

The payment sourcing for stated income loans is also faster and easier than other loan types.

The debt to income ratio of these loans does not factor into any underwriting guidelines.

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Stated Income Loans

If you are self-employed, stated income loans may be the best option for you. You are not required to show any proof of income or taxes and the loan process is hassle-free.

Feel free to contact us with further questions regarding stated income loans or any other loan type.

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