Stated Incomes Still Offered But Hard to Find
Joe had a decent job earning $30,000 per year. He started his online business and after a turn of good fortune, he started earning $900,000 per year during the second part of the year. With his newly found income he wanted to buy a 1.3 million dollar house. With a $75,000 monthly income you would imagine he would have no problems getting financed for a house, correct? Wrong! Banks look at two years worth of income when financing for a home loan, Joe’s last two years of taxes filed only showed an income of about $60,000 over two years. They refused to take into account his recent upturn in income because he had not filed taxes yet.
Joe finally got financing on his house after searching for days for anyone who would offer him financing. His solution: stated income loans. “This was crazy, I was making 75K a month and nobody was willing to give me a home loan. I have almost an 800 credit score and decent reserves and they still refused!” Joe finally found one bank that could finally meet his criteria. This bank required excellent credit, $100,000 in deposit with the bank, and a down payment of 60% of the purchase price. Many Americans find themselves in the same predicament as Joe, they may have a sudden source of income, but their wealth has not been demonstrated with two years worth of tax returns to show income proof to the lenders. Therefore, those who are able to afford luxurious homes are having difficulty purchasing homes due to new bank regulations placed after the recent mortgage meltdown. For the newly minted rich, their only alternative may be stated incomes, but these kind of loans are getting more and more difficult to find. Another option if all else fails, may be private money, where you pay outrageous rates (from 9-12%), but sometimes it may be the only other alternative for those have run out of resources.
Luckily Joe was able to finance his house with a stated income but he almost missed the opportunity. “I was lucky, you need to do a lot of searching to find the right lender. My advice is to not give up, there are still lenders offering great loans, but with strict restrictions.” Joe welcomes anyone to contact him if they believe they are a great candidate for a stated income. He hopes he can guide you to the right path and not make the same mistakes he did. Contact him at joeradan [at] gmail dot com.
