If you’re a self-employed individual looking to apply for a mortgage loan, you might be overwhelmed with the traditional mortgage lending process.
Between the pile of paperwork, the required information about income, the bank account totals, and all the asset requirements – prospective Real Estate Investors are limited to applying or receiving a loan a self-employed person.
This is why real estate investors look towards private money loans as the solution to acquiring funding for their real estate investment properties.
One of the leading private money loan programs is a stated income loan, which allows the borrower to secure funding without needing to qualify on their debt-to-income ratio.
A stated income loan is easier to be approved for than a traditional loan, and is a way for self-employed people who would not qualify for a traditional financing to achieve their investment dreams. Though there has been much criticism of stated income loans recently, for certain borrowers, they are the best fit.
How to Qualify for a Stated Income Loan
To qualify for a stated income loan, you need proof of at least 2 years’ worth of self-employment. No W2 forms, liabilities, or other proof of income or employment are required.
When applying, simply show your trust private money lender your bank statements for the past 2 months, business license, and proof you are still in business.
Basing loan approvals on proof of self-employment or bank statements, rather than W2’s and liabilities makes the process quick and hassle-free.
Some of the benefits of the application process for a Stated Income Loan include:
Low amounts of paperwork
Payment sourcing is faster and easier
Debt to Income Ratio does not factor into underwriting guidelines