Can you get a mortgage with stated income?
A stated income mortgage is a home loan that requires no income verification or documentation. Hence the terms “no doc mortgage” or “no income verification mortgage”. Back when stated income loans were commonplace, a borrower with a decent credit score could simply state their income on the loan application.
How do you prove stated income?
Today’s stated income mortgage still requires you to prove your income, but you can do so with bank statements rather than traditional documentation, such as W-2s, pay stubs, and tax returns.
Can you refinance with no income?
Yes, You Can Still Get A Mortgage Or Refinance While Unemployed. You can purchase a home or refinance if you’re unemployed, though there are additional challenges. There are a few things you can do to improve your chances as well. Many lenders want to see proof of income to know that you’re able to repay the loan.
Are stated income loans legal?
With the passing of the Frank-Dodd Act of 2010, stated income loans for owner-occupied properties are now illegal. Lenders must fully document a borrower’s ability to repay the loan either with income or assets. That leaves some borrowers at a disadvantage, especially self-employed borrowers.
How do I prove my income for a mortgage?
To verify your income, your mortgage lender will likely require a couple of recent paycheck stubs (or their electronic equivalent) and your most recent W-2 form. In some cases the lender may request a proof of income letter from your employer, particularly if you recently changed jobs.
How do mortgage lenders verify income?
Mortgage lenders verify employment by contacting employers directly and requesting income information and related documentation. Most lenders only require verbal confirmation, but some will seek email or fax verification. Lenders can verify self-employment income by obtaining tax return transcripts from the IRS.
Are stated income loans still available?
Now, as a result of the 2010 Dodd-Frank Wall Street Reform and the Consumer Protection Act, borrowers of owner-occupied properties can no longer take out stated income loans. But they haven’t completely disappeared. They are still available to investors looking to buy property.
How does a stated income loan work?
A stated income loan is a mortgage where the lender does not verify the borrower’s income by looking at their pay stubs, W-2 (employee income) forms, income tax returns, or other records. Instead, borrowers are simply asked to state their income, and taken at their word.
Can I include my wife’s income for a mortgage?
If you want to include your spouse’s income when you apply for the mortgage then he or she is required to be a co-borrower on the loan application. In this scenario, your spouse’s monthly gross income and debt payments are added to your income and debt to determine the mortgage you qualify for.
What happens if you lose your job while refinancing?
Even a refinance with a lower payment is likely to be at risk of closing with an employment interruption. There’s little chance that your loan will “slip through the cracks” without the lender becoming aware of your employment situation. Lenders will verify your employment days before you sign the paperwork.
Are stated income loans really back?
Stated income loans are now back and much better! All those disheartened amateur real estate investors have an opportunity again. And there cannot be happier news to the self-employed professionals and the freelancing professionals who do not have regular salary slips or a regular consistent source of income. Yes, you heard that right!
A true stated income loan is only available for non-occupying investors looking for short-term financing on investment properties. These loans are akin to hard money loans. For all other stated income programs, you will need to prove your income. But you don’t have to do so through tax returns.
Is a refinance easier than buying a home?
Many people think that refinancing is easier than buying a home for two main reasons: 1) you already have a loan on the home, you make your payments, so it should be easy to refinance. 2) your current mortgage lender already has all their information, so they with easily refinance you, and they are the best place to call **
What should you know about stated income loans?
You still need to prove your income with a stated income loan.