Getting loans is not simple as many thought it would be. Self-employed people might have a very difficult time getting a regular loan, however with the new loan program stated income mortgage and no-docs loans self employed can qualify for a loan based on what they declare. These are riskier and there aren’t many lenders available for these types of loans. They are provided mainly for self-employed workers who cannot verify their income. The process is more simple and the requirement is lower.
Feature of Stated Income Mortgage
Banks or other conventional lenders don’t see self-employed and small business owners as the ideal borrowers. These money lending institutions only provided money for those who are creditworthy. Prime borrowers have stable and confirmable incomes. In fact, their credit scores are great. Self-employed workers are less attractive for the lenders. They have limited ability to apply for loans as well as to discuss a lower interest amount. These people also have difficulties to find lenders who want to work with them in the first place. Lenders may wonder if self-employed workers are able to make enough cash to buy a house.
How to Apply State Income Loans
Due to current economy condition, it can be harder for small business owners and self-employed to get mortgages as banks won’t take risky decisions to keep their reputations. In this case, there are other types of loans for those who suffer from such difficulties. A no income verification mortgage or SISA is the best option. It’s a unique mortgage as borrowers need only to tell the bank their income is. The money lending institutions won’t check or verify this income. Lenders only verify borrowers’ sources of income. In this case, debtors should provide cash flow sources and a list of clients. Any records of source income will do. Even a business license also works well.
Sometimes, the lenders may ask an IRS form. It’s to prevent a fraudulent activity of the borrowers. Another alternative loan is no documentation loan. Lenders won’t verify information of debtors’ income. This is a great option for small business owners, especially with a statement of low profit and business loss. The banks will take the risk by providing money to people with an unconfirmed income. Thus, they will charge them with higher interest rate. Borrowers should be ready paying much interest rate than conventional loans. This is something that all debtors should take into consideration before applying for stated income loans.
While both small business owners and self-employed people are able to choose those alternative loans due to insufficient information of documents, they need to take a responsibility for paying higher interest rate. On the other hand, people who can prove their incomes need to submit more documents. In result, they can get lower interest rates than stated income loans. Small business owners who can’t provide sufficient documents should submit profit and loss testimonials. Some stated income mortgage lenders will accept this kind of document.
Anyone who has a hard time getting qualifies for a regular conventional loan can apply for stated income mortgage at QKmortgage.com. The main requirement for approval is to be able to afford 30% down payment and have a credit score of 600 or better.