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Stated Income Mortgage Alternatives

Need a mortgage but are having trouble documenting income?

There are 6 loan options out there today for Home buyers that want to purchase a home but are unable to meet the standard income guidelines.

1. Bank Statement Program. Simply put, these loans let you use income deposited into your bank as your qualifying income. This is instead of showing pay stubs, W2’s and Tax Returns. This is for self employed individuals. Some allow for personal bank statements and some require business bank statements.

2. Close in a business. These mortgage loans are for purchasing residential real estate and closing a business such as LLC. They are based upon the equity in the property and not on the buyers income. Require larger down payment and the property is not for personal use.

3. Investor Loans. These loans are to purchase residential property and allow for the use of existing leases or proposed rental income on the subject property. If the home being purchased does not have an existing rental income flow and bought to rent out then an appraisal will show market rent for the property. So lease income or market rent from the appraisal are used to offset the mortgage payment.

4. Asset Depletion. This loan calculates monthly income by dividing a borrower’s total assets by a set number of months. The borrower is not required to cash in their assets, they are only used to demonstrate an ability to make the mortgage payments. *For example $500,000 in assets divided by 84 months = $5,952 monthly income for qualifying. Different lenders use different calculations. Can also be used in conjunction with your standard regular qualifying income but at different calculation.

5. Non – Occupying Co-Borrower. This loan allows someone that is not going to occupy the property to be on the loan and add their income to the occupant buyers income. This is for situations when the occupant borrower does not have enough income to qualify for the loan by him/her self. Typically the non-occupant is a family member, but that is not required.

6. Non-Borrower Income. This loan allows income from non-borrowers who contribute to household income to be considered in the qualifying for the mortgage. This is called an extended income Household or EIH. Non-borrower household members may be relatives or non-relatives, including a spouse who is not on the loan or adult children, parents, other relatives, and domestic partners.

All of these scenarios require the assistance of a mortgage professional. Jason Kaplan can be reached at 863-409-8909.

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