Stated Income Credit Lines
People who get most of their income from commissioned sales or own their own business often have a very difficult time being approved for credit. When they go to apply for a mortgage or line of credit, they are met with resistance by the bank, because they can not provide supporting documentation of their annual income. Lenders have recently addressed this problem, by introducing stated income credit products.
If you want to borrow against the equity in your home you may be eligible for a stated income line of credit. The lender will not require you to provide proof of your income, but instead will take your word for it. Then, once approved, they account will be administered like any other.
It is a common business objective to strive to keep taxable income as low as possible by deducting eligible expenses. This is at odds with lenders who like to see as big an income as possible. They more income the easier it is for the borrower to service their total debt. Stated income credit products solve this.
In order to be approved for this type of loan you need to have very good credit and a very high credit score. The lender looks for this because they do not request you to bring in pay stubs or W2s. They increase their risk when they don't verify income, so they look to shore this up in other areas.
Interest rates and fees on stated income loans are often greater than on usual loans. This helps to offset some of the increased risk the lender takes as well. All in all, however they are by no means excessive.
Some lenders will have unique criteria for these loans such as how long the applicant needs to have been in business. Additionally some banks may impose limits on how much greater the new monthly payment may be compared to how it was before. The lender simply wants to make sure that all the areas they can verify, are as solid as possible.
You can meet with a broker or search online for a mortgage lender that offers stated income products. It is encouraging to know that the financial institutions are taking the unique needs of the small business owner seriously. You might just have to work a little to search them out.
If you want to borrow against the equity in your home you may be eligible for a stated income line of credit. The lender will not require you to provide proof of your income, but instead will take your word for it. Then, once approved, they account will be administered like any other.
It is a common business objective to strive to keep taxable income as low as possible by deducting eligible expenses. This is at odds with lenders who like to see as big an income as possible. They more income the easier it is for the borrower to service their total debt. Stated income credit products solve this.
In order to be approved for this type of loan you need to have very good credit and a very high credit score. The lender looks for this because they do not request you to bring in pay stubs or W2s. They increase their risk when they don't verify income, so they look to shore this up in other areas.
Interest rates and fees on stated income loans are often greater than on usual loans. This helps to offset some of the increased risk the lender takes as well. All in all, however they are by no means excessive.
Some lenders will have unique criteria for these loans such as how long the applicant needs to have been in business. Additionally some banks may impose limits on how much greater the new monthly payment may be compared to how it was before. The lender simply wants to make sure that all the areas they can verify, are as solid as possible.
You can meet with a broker or search online for a mortgage lender that offers stated income products. It is encouraging to know that the financial institutions are taking the unique needs of the small business owner seriously. You might just have to work a little to search them out.
About the Author:
If you are self employed, learn more about the stated income equity line at Pat's mortgage website.
posted by Debt Consolidation Loan at
7:48 AM
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