Stated Income Mortgage loans fueled real estate sales over the last couple of years. It is said that these loan programs have also created the highest foreclosure rate in many years. Mortgage companies have increased credit scores for these programs drastically over the last few months. Do you qualify now? During the big real estate sales boom of 2004 through 2006, mortgage companies were getting more and more competitive by lowering the credit score requirements for stated income mortgage financing.
At one time, a home-buyer with a 580 credit score could secure one hundred percent financing to buy a home, without even proving his or her income! Well, as many people know the mortgage investors that were funding these easy to get approved type loans are either no longer in business or struggling to stay in business. Stated income mortgage programs were designed for home-buyers that were 1099 employees or self employed. Over the years, the requirements have changed greatly on these mortgage programs.
Now a W2 wage earner qualifies just as easily as a business owner, as long as they can reasonably state their income. When I say reasonably state their income, I don't mean a dishwasher at fast food joint stating that he makes $10,000 each month. Yes, that is unreasonable! The income stated must be in line with the national average for that particular profession or trade. Even sub prime lenders now also want to see a minimum of a 660 credit score to qualify for a 100 percent stated income mortgage financing program.
These programs are excellent for self employed or self made millionaires that have trouble documenting the income they make. Beware of mortgage brokers that ask you to state your income for far more than you actually earn each month. Over stating your income is a sure fire way to jeapordize your financial future. When looking into a stated income mortgage program, be sure to deal with only an experienced mortgage professional with a good reputation.
Glenn Keller is a veteran Florida mortgage broker and is associated with 1st Continental Mortgage in Saint Augustine, Florida. To learn more about buying a home with an FHA or VA mortgage, visit his website at http://www.bretlinfloridamortgage.com
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