Updated: Jun 15
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
What Exactly IS a Stated Income Loan?
A stated income loan from private money lenders is categorized as a non-qualified mortgage aka a NON-QM loan.
A non-qualifying mortgage loan (NON-QM) is available for both self-employed individuals and those with proof of income in the form of a W2.
Self-employed borrowers can find it difficult to qualify for a traditional mortgage loan in their investment property, as many mortgage lenders do not want to risk lending to a borrower without a regular paycheck.
Reputable private money lenders, like Stratton Equities, are happy to view your bank statements and get the paperwork rolling rapidly. They are able to do this due to the nature of a private money loan and the structure of their underwriting guidelines.
How Stratton Equities Can Help
If you want to purchase an investment property but are worried about your self-employed status disqualifying you from traditional mortgages, call Stratton Equities at 800-962-6613, email us, or apply for loan pre-qualification today!
Our loan officers will talk you through the process of applying for a stated income loan and will quickly process the application, allowing you to run your business and get the funding you need to buy your dream real estate investment property.
Contact Stratton Equities today, and we can help you determine which loan fits your real estate investment the best! We are a nationwide leading direct hard money and NON-QM lender – we have a wide-range of programs, lowest private money rates (starting at 4.5%), a helpful, friendly, and professional team, and a quick and hassle-free loan approval process. Working with us will get you through all the fine details in a rapid process, out-pacing our competitors.