Is there still stated income loans for real estate investing? This is an interesting question. Why? Because, since the great recession of 2008, there have been many changes to the US financial infrastructure and the financial institutions who issued many of the very technical instruments which many believe caused the collapse of the mortgage industry. Although many of these financial instruments were terminated by laws such as the Dodd-Frank act of 2010, the stated income loan was not. So, let’s explore this often confusing loan and answer any questions one may have.
The stated income loan is a loan that doesn’t require the borrower to show their tax returns. So, you might be wondering how can I get a loan without showing my tax returns? Well, a stated income loan was created for people who are self-employed such as independent contractors, freelancers, and small business owners. These stated income loans are ideal for investors who intend to buy and rent investment property without fully documenting their income. They can also come in handy when you need to purchase a building for your business or the building your business is currently leasing.
Are You Eligible For A Stated Income Loan?
To answer this question there are a couple sub-questions that should be answered first.
- Is your credit score good? If your credit score is below the ideal score for candidates who are or have been given stated income loans, you shouldn’t apply for a stated income loan or should be given one by a lender. The absolute lowest score currently is 600. You will take advantage of better rates if you are 720 or higher.
- Do you have at least the minimum cash reserved to make the down payment on the property for which you are taking out the loan to acquire? It’s important that you’ve saved up enough cash to be able to make the down payment since this will be an important factor in the monthly installment of your loan and the interest rates. Stated income loan lenders usually require at least a 20% down payment used for real estate investments or owner occupied business properties.
- Are your employment history, bank statements, and documentation up-to-date enough to show you have the legal standings to acquire the state income loan? Having up-to-date records and the documentation necessary before even meeting with the lender because this will show you are responsible and it’s legally required for the stated income loan.
What Are Stated Income Loans Used For?
Stated income loans may be used to fund many things but it’s mainly used for buying properties for rental purposes. It can also be used to purchase a building for your business or purchasing the building your business is currently leasing. Therefore, as we can see, stated income loans are back, without ever leaving.
What Qualifies You For A Stated Income Loan?
- Daycare centers
ICA Has The Right Stated Income Loan For Your Every Need
If you’re unable to get a loan because your tax returns don’t show enough income, ICA has a stated income loan financing program that does not rely on your tax returns for approval. We will not even ask you to see them! We will base our decision for commercial income properties on bank statements, a rent roll, and leases. For owner-occupied business properties, we will base our decision on bank statements and a Profit & Loss Statement!
- Tax returns are not required
- Loan amounts 150k-2M
- Rates from 6.5% – 9%
- Purchase, cash-out or refinance
- Amortization: 30 Years
- Minimum credit score 650 (mid score)
So, investors and business owners looking for financing for an upcoming project but need alternative sources other than banks, look no further. ICA is here to serve you. Before you even start looking at your next investment property, make sure to check in with us at ICA by calling us at 1-800-975-1691.