After lending institutions started feeling the effects of the downturn in the housing market, they tightened their belts in regards to offering loans to homebuyers. One of the popular types of loan packages that were prevalent before the foreclosure crisis was the stated income mortgage. After the number of individuals and families that started to lose their homes rose, no income home loans were eliminated. The banks were trying to protect themselves from riskier investment opportunities. For the less established individual, this hampered their ability to quality for a home loan. Now that conditions are beginning to stabilize, many financial companies are returning to previous lending practices.

Home Loans for the Self-Employed

The mechanics of a stated income mortgage are fairly straightforward. The requirement is that many self-employed borrowers need stated income loans in order to qualify for a loan to provide funding for a house. These methods of borrowing money to streamline refinance do not require income documentation like W2’s to ease the overall process. It provides kind of a loop hole to overcome the difficulty that self-employed individuals may face when attempting to finance an investment property. Banks that feel more secure in the stability of the economy have once again begun to offer this type of financing.

• No Income Refinancing
• Stated Income Home Loan
• Limited Documentation Loans

Using personal tax returns and paystubs, the interested individual can begin the application process. When working with the employees of a lending company, be sure to state the intention of applying for a stated income mortgage. This will prevent any undue complications and speed up the process for acquiring the needed funds. Since this alternate form of supporting a loan application is different from the norm, ensure that all documentation is in order. Any discrepancies can cause delays in processing the inquiry. Understanding the terms of the program is recommended before seeking out this form of funding.

The more common form of mortgage applications may not require documentation for the lending institution but they verify with your employer that you do work there. For the self-employed, there will not be any way to confirm the place of employment other that personal integrity. This is why the stated income mortgage requires personal tax forms to supply the needed references. This added wrinkle in the home loan application process is a small obstacle to overcome. For most people, it will not be a major deterrent. Rather, it will require that the individual continues to rely on themselves to make the process happen successfully.