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What is a Stated Income Loan?

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Stated income mortgage loans are loans when a borrower doesn’t require the borrower’s pay stubs, W-2 (employee income) forms, income tax returns, or other information to verify his or her income. The only thing a borrower has to do is to mention the amount of the salary in the application. Stated income loans self-employed are the traditional loans, so-called trailblazers. Therefore, you can find many suitable options if you are self-employed.

These loans are also called liar’s loan because many borrowers exaggerate their creditworthiness to qualify for a mortgage.

The only benefit of the stated income mortgage loans is that they are a good option when the borrower can’t qualify for traditional loans. The other type of the loan that a borrower can also consider is a no income disclosure loan.

Depending on a specific situation, a borrower can apply for

  • A full documentation loan that requires income verification with the help of tax returns and/or pay stubs and verification of assets with the help of asset documentation such as bank statements.
  • A SIVA loan (stated income/verified asset loan) that requires revealing of monthly gross income and verification of assets by bank statements or similar documentation.
  • A SISA loan (stated income/stated asset loan) requires just stating both monthly gross income and asset verification.

Basing on the aforementioned information, a lender generates a debt-to-income ratio.

If you don’t want to provide this information, you can consider applying for a no doc loan.