Stated Income Mortgage Loan: What You Need To Know. Not everyone has steady work with solid W-2s, a solid creditor list, bank statements from the past couple of years and other required documentation in order to apply for a mortgage loan. Some people might have moonlighting income, multiple part time income sources, full time consulting, freelance and / or other income sources, but may not necessarily have all the required documentation or want to take the time to gather it together in order to apply for a loan.
There is an alternative. For mortgage shoppers looking for a good mortgage program without a lot of documentation required, stated income mortgage loans can be a good fit.
What is a Stated Income Mortgage Loan?
A stated income mortgage loan program is an alternative to the conventional mortgage loan process that obligates the property buyer to hunt down and turn in large amounts of contract documentation materials.
This large amount is referred to in the industry as full documentation or in short: full-doc because loan seekers need to have a lengthy shopping list of items: a list of current and past lending and credit institutions with account numbers of closed or opened accounts to check credit history and payments, a couple of paycheck statements, income tax returns for the past couple of years, W-2s, a couple of months of bank statements, and any other income / expense related documents such as divorce agreements and settlements, bankruptcy, liens or other issues.
However, in comparison to full document loans, no-doc or low-doc loans such as stated income mortgage program requires a fairly light amount to even no amount of loan documentation. Mortgage loan shoppers do not necessarily need to prove their income through a variety of forms and stubs; however they do need to have income and prove it to the satisfaction of the lenders, be it with only a small sampling or combination of their income tax returns, financial statements or income / expense statements.