California’s economy is the largest among all the US states. If California were a country, it would have been the 5th largest economy in the world. The Golden State is home to Hollywood celebrities, Silicon Valley technology, including Apple and Facebook.
San Jose, San Diego, Los Angeles, Sacramento, and Riverside are five major cities of California where self-employed entrepreneurs and small businesses are emerging. These self-employed business owners need mortgage loans and self-employment financing.
The no document verification mortgage loans that are also known as stated income loans are considered the best choice for self-employed business owners. If you live in California as a self-employed person without any regular means of income, you are eligible for the stated income loan.
While you must show proof of income, your tax returns when you apply for a traditional home loan, you don’t need any documented verification for the bank statement mortgage loan.
Self-employed home loan alternative.
It is difficult for self-employed borrowers to qualify for a traditional home loan because the mortgage brokers require them to meet the strict documentation requirements. If you are someone with a variable or seasonable income, it gets challenging for you to save money in California and buy a house.
The stated income loan is an alternative for you if you are a self-employed borrower or live on a seasonal income. All you are required to do is show your bank statement to the mortgage lenders to show your income so they can determine your net income.
What is a stated income loan?
In stated income loans, borrowers don’t need to provide the lenders their source of income with tax returns. However, lenders verify your employment, assets, and credit scores.
This type of loan was introduced for self-employed borrowers with variable income and complicated tax return schedules. In the early 2000s, bank statement loans or stated income loans were quite popular.
Mortgage lenders did not need the borrowers to show their income documentation. They were required to show their bank statement to make sure they’d be able to repay the loan. This led to several defaulted loans.
The Frank-Dodd Act stated that these loans were illegal and transformed the loans for good. Lenders had to get all the documentation from the borrowers to ensure that they can repay the loan.
The stated income loans in California are available for real estate investors. They aren’t required to show their tax returns to keep the need of the self-employed borrowers who do not have a definite monthly income.
How do you qualify for a stated income loan in California?
As a borrower, you need to maintain a good credit score to be eligible for the stated income loan. You also need to have large amounts of money in your savings, a high-income level, and a large down payment.
Lenders need to make sure you can repay the loan. The good thing is, you are not required to provide the record of your tax returns to the lenders.
Do you qualify for the stated income loan in California? If you provide the asset documentation and bank statements, let the lenders be sure that you have enough money. The better picture you can show your lender that you can pay the loan back, the more favorable interest rates you get. It is more likely for you to get your loan approved.
Where can I get a stated income loan?
If you are looking for a bank statement mortgage, you can do your research with the mortgage brokers with the different options available.
There are different types of stated income loans other lenders offer. You can look into the requirements and lending options they are offering.
Every mortgage lender has his criteria to qualify borrowers for a loan. Some lenders require a higher credit score, while others a sizable down payment.
The lender will not be asking for your tax returns. They will get an idea about your monthly cash flow from your 12-month bank statement.
The lenders have all the information you require on their websites. You can check if you qualify for the loan and apply for it.
ID Mortgage Broker offers you a no document loan in California. You can invest in real estate without tax returns. They match your affordability and can offer you the best interest rates on the market.
Requirements of a stated income loan in California
- Self-employment
- 10-20% down payment
- Credit score more than 620
- Bank statement- 12 to 24 months
- Asset Verification
- Properties you already have
- No Tax returns needed
Can I get the loan if I don’t have regular means of income?
As long as lenders have the confidence in you that you can afford to make regular payments for the loan, you can qualify for the stated income loan even if you don’t have a standard means of income.
Is a no document loan or stated income loan right for you?
No document loans for real estate are worth considering if you are self-employed and have a seasonal stream of income.
You might get a hard time qualifying the conventional loan if you have a variable income and no document to show your income. Stated income loans are ideal for people who want to buy their homes with a bank statement record.
If you are someone who does not have a sufficient income, you won’t be able to use this kind of loan because of your inadequate financial standing.
Conclusion:
Self-employed people find it challenging to get a home loan to buy the house of their dreams. There are strict documentation rules which do not qualify them to get a home loan from the mortgage broker.
An ID mortgage broker simplifies the process of getting a loan for someone who is self-employed and wanting to own a house. The mortgage lenders will assist you in finding the home that matches your credit score.
