Stated Income Loans: Slow and Sure Mainstreaming

2007-03-08 10:33:40

( Financial )



Stated income loans come in many guises. Stated income loans are also called no income verification loans or self-certified loans. These types of loans cater to what mainstream creditors consider as substandard borrowers or those who fail to make the cut in so far as proof if income is concerned.

AT FACE VALUE

However, the truth is that our population has a significant potion of those who are not traditionally employed, but are earning nevertheless. These are made up of self-employed individuals who prefer to work at home, on a free-lance, or on a per project basis.

These people, while not able to present proper proof of income, are nevertheless making good money, good enough to make a decent living.

This is the premise behind stated income loans or no income verification loans . The income statement that you make and submit to the lender is taken at face value because there is no other way to verify the self certification. Of course while no other proof of income is required from you, you have to be able to back-up or support your stated income loans applications with other financial documents such as assets and properties, and credit profile. You can also submit a list of your clients as references.

UNIQUELY FLEXIBLE

The advantage of stated income loans is that it is tailor-made to adjust to the unique circumstances of a non-traditional income earner. The payment terms are more flexible, with allowances for lump sum and partial payments to adapt to your irregular cash flow.

The percentage of people going into self-employment is growing as more and more people are trying to balance work with family responsibilities. Even as we speak, stated income loans are being offered by more and more creditors, with traditional lenders following suit.

As this trend continues to grow, we will soon see the day when non-traditional income earners are mainstreamed as well.


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