It looks like stated income loans are making a real comeback in 2016, which offers a new mortgage loan option to real estate investors who need to borrow money don’t want to deal with lots of income tax documentation. So in today’s article from The Short Sale Gal Kristine Zelazo, we’ll explore how stated income loans work and how they’re making a comeback this year!
What are Stated Income Loans?
Stated income loans are a type of mortgage loan that don’t require the borrower to present tax returns. It’s curious that these loans are even still available, as these loans were a cause of the economic collapse. But sure enough, they’re now available again.
Stated income loans are ideal borrowers, like independent contractors, individuals who are self-employed and others who find it challenging to document their income. These loans can be used to purchase non-occupant properties that are acquired as an investment.
This type of loan is also suitable for investors like “fix and flippers” and small business owners who are seeking to leverage their equity by maintaining a property as a rental holding. This program helps investors and even landlords with multiple expense tax return write-offs to get a loan to purchase an investment property without offering full documentation of their income.
Who Qualifies for Stated Income Loans?
Stated income loans have some unique qualifications. A high credit score is a must since there’s less documentation involved. You’ll also need plenty of cash reserves and a high down payment to help offset the risk that’s acquired by the lender as a result of the reduced documentation requirements.
According to one lender who deals in stated income loans, “a buyer has to put down at least 30 percent down instead of the regular 20 percent on a conventional loan. Many of our clients end up putting down 35-50 percent…The loan also has maximum 70 loan-to-value ratio.”
You can also expect to have your employment verified. Stated income loan applicants will also need to provide asset documentation and bank statements to prove that you actually have the funds.
NEED HELP Getting Started in Real Estate Investing?
There are a number of unique steps and processes involved when getting started in real estate investing, but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!
To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 786.570.0360.