How Is a Stated Income Loan Different From a Traditional Mortgage?
Stated income mortgages, also called mortgages for the self employed borrowers, are commonly used by business people who can’t show their income under traditional lending guidelines.
It is increasingly challenging for real estate owners who also own a business, to qualify for mortgage options due to their many write off advantages. That’s because tax returns and savings advantages significantly reduce their net income under banks rigid guidelines for a home loan.
And although most of the banks say no, there are still specific lenders that are willing to work with these challenging application types, and offer no bank statement loans.
Best Stated Income Mortgage Products in BC
Mortgages for self employed are great products because they are available at discounted rates. The key requirements for these mortgage loans are as follows:
- Notice of Assessment or NOA (full document) Your net income stated is shown on the line 150 but this has little effect on the application. Lenders are interested mostly to verify you owe no personal income tax.
- Proof that you have been in business for at least 2 years by providing one of the following: Articles of incorporation, Business License or GST Returns etc.
How To Address Options In Self Employed Financing
The challenges some self-employed borrowers face to refinance their mortgage or purchase their first investment property, or home are having businesses with many write offs. A stated income mortgage might be their best option.
Unverifiable income is the number one reason people turn to a mortgage professional in search of alternative income verification loans. Many times, this type of borrower might have tried three or four banks, got rejected for one reason or another, and have had multiple credit searches done. The fact of the matter is that not all banks want your business if they cannot be sure that you have the ability to repay the loan.
I can quickly review your situation and discuss the options of either helping you refinance with a bank or b-lender, or offer you a short-term consolidation of debt using one of my private lenders.
Conventional Purchase up to 90% (income gross up options only):
- (Best Rate) Gross Up Income Purchase up to 90% LTV
- Self Employed or Commissioned for 2 years
- CMHC Insurance Is Required
- Flexible Income Documentation (documentation is required)
- 1-5-year fixed terms & 3 & 5 year ARM Terms
Mortgage Options For Both Self Employed And Salaried Employees
Conventional Refinance to 65%
- Best Rate up to 65%
- Self-employed 2 years, Commissioned 2 years or Salaried
- Flexible income documentation
- 35% of the down payment must be from own resources OR equity in assets
- Currently the few lenders that allow stated income have some conditions – CALL ME FOR DETAILS
With this product I can employ techniques that may allow you to obtain financing up to 80% LTV using alternative options.
B-Lender (Prime + Rates) Stated Income up to 75% or a combined 1st 2nd to 80%
- Proof of BFS for 2 years
- Proof of NOA filed or Statutory Declaration
- State Your income (it’s that easy)
Unverifiable Stated Income Mortgages
Are there no income verification mortgages? Yes! At any time, you could lose your income stream or be unable to provide proof of your income, and thus find yourself looking for a no income or unverifiable income mortgage.
This financial tool is in essence a home equity product but in this case, the borrower’s income doesn’t matter. You may have no income at all and are looking for a stated income mortgage loan to bridge yourself until you are back to work, or able to solve your financial problem.
So if you are worried about having unverifiable income or even no income, we can help! We have many equity products that can get you the funds you need to get through difficult times.
Each case is unique, and I can assist you with creative options we can use for your loan application, allowing you to maximize your cash flow.
There are many things to consider so call us today and let us set you up for success.
Bank Equity Programs 50% to 65%
This is a great option through our monoline lenders. Lenders have min credit scores requirements but interest rates are competitive with other schedule A banks. 1 – 5 year closed terms, 3 to 5-year variable and up to 35 year amortizations on 5 year terms.
Conditions apply so give me a call and I would be happy to walk you through the process.
A B-lender will allow self-employed, commissioned, or people earning tips, to qualify up to 75% and in some cases 80% (with an in-house product) to refinance or purchase a home with a stated income mortgage.
Keys here are that your bank statements should be filed, showing that no money is owed to CRA. This allows you to state your income to qualify for a mortgage.
This type of product does have credit requirements and of course, it comes with a slightly higher monthly rate than prime mortgages.
To learn more or to apply, call us today.
Stated Income Mortgage
Self-employed, commissioned or employees earning tips, have options available to them in the form of a stated income mortgage loan.
These mortgage products have seen some changes over the past few years and will likely change some more in the years to come so it is best to consult with your BC mortgage broker to learn more. The basics are that individuals who can’t, or do not wish to claim their true income, can simply state their income within reason to qualify for a stated income mortgage loan.
Private Mortgage Lenders
I work with some of the lowest cost private mortgage lenders. And because I do such a high volume of private loans, some mortgage investment corporations offer me preferred pricing. This enables me to place my highest quality applicants with the lenders that offer the best rates.
I also deal directly with hundreds of other small and large companies, or individuals, and I pride myself with getting better rates and terms for my clients, than if they tried themselves to deal directly.
Call me! I would be more than happy to talk to you about my process, and help you get the stated income mortgage you are looking for.