Updated January, 2016
Stated Income Loans in 2016: Yes, They Are Coming Back
Just a few years ago, stated income loans were very popular and there were plenty of stated income lenders who had flexible guidelines and low stated income rates.
Then the credit crisis hit and lenders began pulling their stated income mortgage programs. As lenders began to stop offering stated income loans, many small business owners and others began to have problems getting loans because they have unique situations that the stated income loan programs serve.
Stated income loans are popular with many people, but here are just a few of the types of borrowers who may consider getting a stated income loan:
- Self employed people who own a small business
- Highly commissioned people who may have a low base salary but make most of their income on commission
- People who can’t document at least 2 years of income at their current income levels
- People who make plenty of money but don’t want to disclose their income for one reason or another
In 2016: Guidelines Vary By Lender
With stated loans starting to be offered again from some lenders in 2016, these people (and others) are starting to be able to get loans again which will help them refinance their current house or buy a new house with a mortgage loan. Stated income guidelines are never really the same between lenders. Each lender will develop a stated income product and then create guidelines around the product. Stated income programs will vary by lender and will usually develop nicknames like “no doc”, “low doc”, “SISA” and many more.
Stated Income Lenders
Not all lenders offer stated income loan programs, and most loan officers know that having a stated income lender can make all the difference when it comes to helping a borrower get into a home who is a small business owner. Stated income lenders are mostly smaller lenders at this point who are coming up with creative solutions and stated income products with flexible guidelines so that they can attract business that is good business and not business that they don’t really want.
These stated income loan programs are all going to be different based on guidelines set by the lender. For example, a NINA loan at Lender A will probably have a different guideline set than a NINA at Lender B. This is why it is so important when considering a stated income loan, be sure to shop around.
Stated Income Interest Rates
Stated income interest rates will also vary by lender. Expect the interest rate for a state income loan to be higher than an FHA loan interest rate, but nothing that is out of the market. Stated income loans carry a premium, but they have to be competitive. Expect a couple of percentage points higher than a FHA loan and you should be close.
Frequently Asked Questions
What is a SIVA loan?
SIVA stands for Stated Income Verified Asset loan. This type of loan allows you to state your gross monthly income and requires the lender to verify assets – usually done by you providing bank statements or brokerage statements or some type of document that verifies that you have the assets you claim to have on the loan application.
What is a SISA loan?
SISA stands for Stated Income Stated Assets. It means that the loan guidelines allow you to state your income and assets – meaning you will not have to verify either assets or income.
What is a No Doc loan?
Although guidelines will vary by lender, a true “no doc” loan program is where you don’t have to verify anything other than your citizenship.
Can I be declined if I state my income too high?
Yes. It is possible to have your loan declined for the reason that your stated income doesn’t match your job description and title. If you are a waitress that declares you make 50,000 per month, that may be an example where an Underwriter would look twice at your file. Underwriters have resources to see the range of pay based on title and job description – and while not always accurate, they are typically in the ballpark.
It is also possible that the underwriter or lender will require that you fill out a form (IRS Form 4506), which allows the lender to request IRS verification of your tax returns for the previous two years.
Is there a minimum credit score?
Usually, yes. Minimum credit score requirements will vary by lender and program. There is no one “minimum credit scores for stated income loans are 620” kind of rule – the minimums will vary by lender.
Is there a minimum down payment required?
Usually, yes. Minimum down payment requirements will vary by lender and program. The general rule of thumb with stated income programs is that they will require a higher down payment than conventional loans – but it will vary by lender.
Getting The Best Deal
Because not every lender does stated income loans and the lenders that do actually “do” stated income loans typically only offer a handful of products – getting a loan will require you to shop around a little bit. In 2016, it may be harder to actually find a lender who has the right loan for your situation than it is to find 3 lenders who have the same loan and you just want to get the best rate and fees. Shopping for a lender is easy if you start here – simply submit your information and we will go to work matching you up with a lender who can possibly help you. Getting matched with a lender is free, easy and only takes a couple of minutes.