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Don Maher

"Stated Income" Loans Making A Comeback

Monday, May 2, 2011 - Article by: Don Maher - Universal Capital Mortgage Corp - Message

Quite often, highly qualified borrowers with high net worth and great credit scores cannot qualify for a conventional loan. Whether they are retired, self employed, or simply have a very complicated tax situation, qualifying can be a challenge. Enter the "Stated Income" loan. Originally created for the well qualified self employed borrower, these loans became the most abused mortgage product when investors made the qualifications basically a pulse and a credit score, and helped contribute to the real estate meltdown.

The "revamped" stated income loan is a completely different animal. Going back to guidelines from 1995, these loans are only available for the highly qualified, and fill a much needed void for many homeowners and home buyers who don't meet conventional guidelines. The qualifications are as follows:

720 credit score required
60% maximum loan to value
12 months of PITI reserves required
Loans up to $3,000,000
Owner Occupied, 2nd home, or investor available
Purchase and Refinance transaction
No subordinate financing allowed
These loans are also approved the old fashioned way, by a person. There are no automated underwriting systems or proprietary software that spit out a decision with conditions. They will also take a little longer that a conventional loan that can close in 20 days.

So if you have a well qualifed client that is sturggling to qualify, you may have a home waiting for them with the new and improved "Stated Income" loan.

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