Hi, my name is Florence Dolan. As a professional writer, I want to provide helpful and reliable information about stated income/stated asset mortgages. This article aims to explain what these types of mortgages are, the pros and cons, and some tips on how to get one if you need it.
The Problem with Traditional Mortgages
Traditional mortgages require borrowers to provide proof of income and assets. This can be a problem for self-employed individuals, freelancers, or those whose income comes from non-traditional sources. They may have a hard time getting approved for a mortgage, even if they have a good credit score and a sizeable down payment.
The Solution: Stated Income/Stated Asset Mortgages
Stated income/stated asset mortgages, also known as “liar loans,” allow borrowers to state their income and assets without providing any supporting documentation. This type of mortgage is designed for those who have difficulty proving their income or assets, but have a good credit score and a significant down payment.
How Do Stated Income/Stated Asset Mortgages Work?
When applying for a stated income/stated asset mortgage, borrowers are asked to state their income and assets on the loan application. The lender will then verify the borrower’s credit score, employment history, and other financial information. If the borrower meets the lender’s criteria, they can be approved for the mortgage.
Stated income/stated asset mortgages typically have higher interest rates and fees than traditional mortgages. They also require a larger down payment, usually around 30%. However, they can be a good option for those who cannot qualify for a traditional mortgage and have a significant down payment.
Pros of Stated Income/Stated Asset Mortgages
– Easy application process
– No need to provide extensive documentation
– Good option for self-employed and freelance borrowers
Tips for Getting a Stated Income/Stated Asset Mortgage
– Have a good credit score
– Have a significant down payment
– Be prepared to pay higher interest rates and fees
– Shop around and compare lenders
Frequently Asked Questions
- Q: Can I get a stated income/stated asset mortgage if I have bad credit?
- A: It is possible, but you may have to pay even higher interest rates and fees.
- Q: Can I get a stated income/stated asset mortgage if I am unemployed?
- A: No, lenders require borrowers to have a source of income to qualify for a mortgage.
- Q: How much should my down payment be?
- A: Most lenders require at least 30% down payment for stated income/stated asset mortgages.
- Q: How long does the application process take?
- A: The application process can take a few weeks, depending on the lender.
- Q: Can I use a stated income/stated asset mortgage to buy an investment property?
- A: Yes, but the down payment requirement may be higher.
- Q: Can I refinance my stated income/stated asset mortgage?
- A: Yes, but you may have to provide additional documentation and meet other requirements.
- Q: Are stated income/stated asset mortgages risky?
- A: They can be risky if borrowers overstate their income or assets, but lenders have become more cautious in recent years.
- Q: Can I get a stated income/stated asset mortgage from any lender?
- A: No, not all lenders offer stated income/stated asset mortgages. You may have to shop around to find a lender that offers this type of mortgage.
Summary
Stated income/stated asset mortgages can be a good option for those who have difficulty proving their income or assets, but have a good credit score and a significant down payment. They have a higher interest rate and fees than traditional mortgages, but they offer an easier application process and no need to provide extensive documentation. If you’re considering a stated income/stated asset mortgage, be sure to shop around, compare lenders, and be prepared to pay higher costs.