Exclusive Look Into Stated Income Loans | Valor Lending Group
Are you interested in learning more about Stated Income Loans?
Valor Lending Group is here to give you the exclusive look into Stated Income Loans.
Stated income loans were created for self employed buyers and homeowners that do not qualify for a home loan due to the low income on their tax returns. Self employed individuals use the IRS tax code to write off expenses, however by doing that their income is much lower than the amount needed to qualify for a loan. If using the full income documentation to qualify for a loan, it would not show enough income after deductions and write-offs. Investors and banks created the stated income loan program to help self employed individuals buy or refinance their home. Stated income loans are higher risk and the interest rates will typically be on the higher side of the spectrum, however it is a great option to those that wouldn’t have any other avenues to go down.
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What you will learn:
- What a Stated Income Loan is
- Why you would want to use a Stated Income Loan
- The Difference
- Qualifying
- Stated Income Program Highlights
- What you will need for submission
- Recap on our loan programs
What Are Stated Income Loans?
These are not the type of loans that were prevalent in the pre-2008 financial crisis, and no longer are the days in which loan applicants can simply state their income on a loan application with virtually no due diligence conducted by the lender.
After the 2008 financial crisis, the sweeping provisions of Dodd-Frank changed the industry substantially, at least in the owner-occupied residential context. Since 2010 Dodd-Frank has required lenders to document a residential borrower’s ability to repay the loan.
It is much more difficult to find the best stated income loans as many of the brokers and lenders have ceased to fund these unique programs Bank statement lenders still want to ensure borrowers can repay their mortgages; they just use bank statements to verify income as to opposed to tax returns. Self-employed borrowers are able to document their ability to repay based on business deposits into their personal or business bank accounts, i.e., their true cash flow.
Why Use Stated Income Loans?
1) The Difference
Traditional mortgage lenders require tax returns, W-2s, and paycheck stubs in order to determine monthly income. For salaried and hourly borrowers, the lenders look at gross income for qualifying purposes. But for self-employed borrowers, traditional mortgage lenders look at net income, the adjusted gross income showing on tax returns. This puts self-employed borrowers at a disadvantage because the typical self-employed or 1099 employee will write off as much expense as possible from their gross income on their tax returns to minimize how much they owe once tax season comes around.
2) Qualifying
This is an incredible and expanding area of mortgages that levels the playing field for self-employed and 1099 employee borrowers, providing the opportunity to qualify without tax returns. These types of loan programs can be used for both owner-occupied, and non-owner-occupied 1-4 unit properties, the same as traditional financing allows.
The best bank statement loans, borrowers still must qualify based on the income deposited over a given period, typically verified on 12 or 24 months of bank statements. The gross amount deposited in the given amount of time is then considered their “gross income”. Once this number is established, the debt to income ratio or DTI is derived (based on the income against the new mortgage payment and current monthly minimum debt obligations i.e. credit card, car loan, student loans, etc.) to ensure the borrower can afford the addition of the mortgage loan payment. If all aspects of the borrower’s financial is within the program requirements and a DTI no higher than 55%, the lender will be able to underwrite and finance the loan.
These loans are repackaged and sold on the secondary market just the same as traditional mortgage financing. This is an incredible and expanding area of mortgages that levels the playing field for self-employed and 1099 employee borrowers, providing the opportunity to qualify without tax returns. These types of loan programs can be used for both owner-occupied, and non-owner-occupied 1-4 unit properties alike the same as traditional financing allows.
Stated Income Program Highlights:
- 12 and 24 month Bank Statement options available
- Up to 90% LTV (on Purchases & R/T Refinances)
- Borrower and Lender paid points available
- Must have 2 years verifiable self employment income
- No Tax Returns
What you would need for submission:
- 12-24 Months Bank Statements (business or personal)
- Copy of Business License (3 years)
- Provide CPA Letter (stating you are 100% owner, have been in business for 2 years and taxes have been done for two years | Also list a current expense ratio and the CPA License Number)
- Purchase Contract (for purchase)
- Current Mortgage Statement (for refinance)
- Hazard Insurance Dec Page or New Quote for purchase
- Driver License (front and back)
Bottom Line
Self-employed individuals and business owners if you are looking a loan program look no further. Stated Income Loans can be beneficial to you considering they do not require the use of your tax returns to qualify. If you would like to give us a call we will give you our exclusive look into our Stated Income Loans. Lets start your loan scenario TODAY!
Recap of our Loan Products:
- Stated Income Loans (No Tax Returns, no W-2s, No P&L) up to $3M
- Bank Statement Income Loans (Great Bank Statement Programs for business owners and self-employed)
- Hard Money Loans (As low as 20% down / minimal documentation) Fund in 7-10 days
- Flipper Loans (Flip a property with one of our many options) up to 90% leverage
- Commercial Line of Credit
- 100% Financing (cross collateralize- hard money)
- Foreign Nationals Loans (no social security or residency required)
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up to $500M
- 2nd Position Loans up to $5M
- Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow
- Farms, Vineyards, Ranches and Agricultural Properties (20-30% down)
- 10% down Jumbo’s with NO MI up to $1.5M
- Manufactured Housing / Mobile Homes (20% down / 620+ credit score)
- Acreage Properties
- Commercial Loans up to $500M
- 5% down Jumbo (Up to $2M Lender paid PMI)
We also offer:
- 10, 15, 20, 25, 30 year Fixed, Conventional Conforming Loans (under $484,350)
- High Balance Conforming aka Super Conforming (from $484,350-$726,525)
- Jumbo’s to $10 Million / Super low rates! / 10% down Jumbo to $3mm
- FHA, VA, USDA
- ARM’s
- Reverse mortgages up to $10 Million Value
CONTACT ME TODAY for immediate attention to your scenario!
**Rates and terms subject to change without notice**
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