When you are self employed or own a business, you will not be receiving regular pay checks or other documents that can document your income. This can make it difficult to get loans for homes. It is however possible to get a stated income home loan that completely avoids the need to produce any documents.
Credit Reports Attain Significance
Lenders are nowadays wary of offering home loans based on stated income, as in the present economic downturn, such loans have proved risky. In stated income loans, lenders accept the statement made by the borrower about the income that he or she has, before they make any assessment of the potentials for a loan. They, however, do place a lot of stress on the credit report and a poor credit report can lead to refusal of a loan. In cases, where the lender does issue a loan, the terms are likely to be quite stiff and may involve higher interest rates and more stringent repayment conditions.
Non Owner Occupied Mortgage
Such credit reports have also great significance when you are looking for non owner occupied mortgage, or what are otherwise known as investment loans. Such loans are specifically meant for investment and may have different conditions like flexible repayments, offset accounts and even interest only payments. However, to get such facilities you need a very strong credit history and other documents to prove you have sufficient assets, besides the property for which you are taking the loan. Such mortgages also require you make some form of down payment. Loans larger than the value of the property are also possible, but may require additional security.
The significance of good credit reports gets highlighted when you are looking for a stated income home loan or a non owner occupied mortgage. So if you are in such a situation, you need to pay attention to repairing your credit history, if you have a low rating.
The author has spent a lot of time learning about stated income home loan and other related topics. Read more about non owner occupied mortgage at the author’s website.
