In years past, stated mortgages were like loans that required no kind of documentation, and lenders only required the borrowers’ stated income, which is where the name came from. This is obviously a very risky kind of loan, and in effect, it contributed heavily to the housing market crash which occurred in 2008. Afterward, banks no longer issued stated income loans but completely altered this type of loan to a new and better product.

Modern Stated Income Loans

Today, it is no longer possible to acquire a stated income loan without providing some kind of verification of your ability to repay that loan. The only exception to this is if you happen to be a self-employed businessperson, in which case you would not be obliged to provide documentation. For any other type of borrower, it will be necessary to provide tax return information, W-2 forms, and recent payroll statements in order to qualify for a typical home loan. Self-employed individuals don’t have to provide proof of income, but they will have to carry a high credit score, they’ll need to have a significant cash reserve, and they’ll also need to supply a large down payment. If you can meet these requirements with a lender, your chances are fairly good of being approved, and even of obtaining a favorable interest rate.

Using Stated Income Loans

Many borrowers who successfully obtain a stated income loan use them to purchase a rental property, or to renovate a property prior to flipping it. Other borrowers make use of these loans temporarily while they’re waiting for a large cash advance, so they can purchase an investment property which is currently available. Some borrowers prefer not to consume all their available cash on the purchase of a property, so they make use of a stated income loan to maintain their capital reserve for other investments. As you can see, there are some very creative uses for stated income loans, and if you qualify for one, many of the same options will be available to you.

Would a Stated Income Loan Work for Your Company? 

If so, we may be able to work with you on acquiring a stated income loan. Contact us at Commercial Capital Finance so we can explore some options for providing you with the funding you need.