Stated Income Home Equity Loans

Are you having trouble gathering all of the paperwork necessary for applying for a home loan?  If the answer is yes, then a stated document home equity loan may be right for you.  If you are filling out a full documentation loan and you fall short of any specific paperwork, you may run into some problems with the lender.  Even if your credit score is really good you good still face some downfall if you don’t provide all of the documentation for the loan.  The stated income home loan is the solution to this problem.

Another problem you might be having if you are self-employed would be proving your income.  This can be a nightmare, especially when it can be very difficult to evaluate the income of an individual who is self employed.  If this sounds like a familiar problem then stated income home loans can definitely be effective in securing financing. 

How these loans work is the borrower states his projected income for each month to the lender.  The lender then takes this information and runs a credit check on the borrower.  If the credit history is relatively good then the lender will usually accept the stated income and approve the loan. The two types of stated income home equity loans are SIVA and SISA

SIVA is a stated income/verified asset loan.  This means that the borrower can state his income, but must have documentation of his assets in order to get the loan approved.

This means that if you are applying for this loan you would need a bank statement of some proof assets in order to qualify.  This is good for people who have the paperwork or access to it.

SISA is a stated income/stated assets loan.  This means that the borrower can state both his income and his assets in the loan application.  The benefit of this type of stated income loan is that there is no paper work necessary for the loan to be approved.  The borrower should have a good credit rating and the stated income should fall within the average for that occupation.

If you do apply for a stated income equity loan the lender will either contact your current employer to verify your work, or if you are self-employed they will need to see some proof of earnings.  Usually the lender will look at an average wage for applicant’s occupation and match that with the stated income.  If the income is stated higher than the average for that occupation, the borrower’s loan will be declined.  Lenders want to see similarity in the stated income and the average wage. 

While stated income no document loans are good for many people, they do have some downsides.  The major setback is because the lender is accepting a greater in giving the loan, the interest rates are higher for these loans.  If you take a stated income loan expect to pay a higher interest rate than a fully documented loan.  One thing you should do before you get a loan is compare different rates online and see the best type of loan that fits your specific needs.