Stated Income Mortgages

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Stated Income Mortgages are also known as low document loans and No Income Verification Loans (NIV). In Stated Income Mortgages, the borrowers only have to state their annual income and do not have to provide any form of documentation in the form of tax returns, pay slips, and other documents.

The Mortgages of the Stated Income are usually taken by the people who are self employed, those who like to reduce the quantity of paperwork, those who do not like to share their financial documents, individuals who hide a major portion of their income such as waiters, contractors, and waitresses, and also by those who have started a new job after leaving a job after a long period of time. In the Mortgages of Stated Income, the borrower just has to state his income on the application form and the lender does not verify the income that has been stated by the borrower. In Stated Income Mortgages, the borrower just has to verify his income source and history and not the amount.

In order to get Income Stated Mortgages, the borrower has to have a good credit score and retain employment with an employer for a minimum period of 2 years, and in most cases the borrower must be able to make a down payment of minimum 5% with his own funds. The advantages of Stated Income Mortgage are that the borrower is able to get the home mortgage easily since there is no need for documentation. As a result, the borrower is able to get the loan quickly and the time taken for loan closing is also very less. Also, the borrower is able to get more money as loan in the Stated Income Mortgages then he would get in the regular mortgage.

The disadvantages of Stated Income Mortgage are that the borrower has to pay a very high rate of interest and this puts added pressure on the borrower to pay back a bigger amount of money. Also, the borrower needs to have a very good credit rating in order to qualify for the Mortgages of the Stated Income type.

Stated Income Mortgages have helped many people own their homes – something that they may not have otherwise acquired. As a result, building societies and banks are expected to launch new schemes in the Stated Income Mortgages.

Last Updated on 5/26/2011