Question:

Why are stated income real estate loans so popular?

Answer:

Stated income real estate loans are really great for certain types of borrowers. If you can't prove your income and you have the money -a job bonus, family gift or inheritance, commissions' job or seasonal business - this is the type of loan one should be after.

Consider, though, that you'll have to put up with higher rates and you will need higher credit than if you did fully document your loan. However, stated income allows for enough flexibility; if you go further with reduced documentation and take a No Doc mortgage, rates are getting even higher.

Stated income loans (SILs) do allow for slight income exaggeration. However, loan officers will check your sources of income and employment, so you won't really have the chance to exaggerate much. For couples, SILs are great loans as they are possible to claim the higher credit score and income of the two. Even if this is not quite OK, this is a chance for some borrowers to get more house and if their income exists, it's not as bad as overstating and defaulting on a mortgage.

Very often, a stated income loan (SIL) will be allowed after the borrower signs the 4506 form - this authorizes the lender to verify the loan applicant's income if they become suspicious fraud is involved, or if the borrower defaults.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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