Is Idaho Ready for Stated Income Mortgage?

Idaho Mortgage Stated Income Loan resurgence?

Stated income mortgages? That is crazy talk. That is what got us in this real estate mess to begin with, some would say. Why would anyone even consider such a thing?

Some banks evidently are. Recently I have been receiving more and more emails from various banks promoting their stated income loans. Currently these are pretty niche. Banks are looking at properties with stated income loans with the property in the same city as the actual bank. A representative of the bank drives to the property and does a visual inspection.

These loans are portfolio. Meaning, the bank makes their own rules in order to reduce their risk as much as possible.

What is a stated income mortgage?

A stated income loan does not require income documentation from the buyer. The income “stated” by the potential buyer on the mortgage application is what will determine their qualifying ratios. The income must “make sense” to the applicants line of work, time on the job and other parameters.

Here are a few requirements that the banks will be looking more closely at:

-Large Down payment- 40% is the number I have been hearing. With that much money in the game, a home owner is very motivated to make the mortgage payment each and every month. If not, the bank will gladly take the equity off their hands.

-Six months Cash reserves- A consumer that can demonstrate this type of fiscal discipline, is usually a good credit risk. Again, this was not required just a few years ago.

-Excellent credit- this pretty much goes without saying. Probably 740 to start with.

Possibly a new opportunity for Realtors?

Realtors may consider revisiting their data bases and dig up those self employed potential buyers that had issues qualifying due to lack of taxable income. Alert them to the future possibilities of more stated income products that may become available.

Stated income mortgages are good for the real estate industry if the loans are evaluated with very low risk and basic common sense.

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