“Drawbacks” of Stated Income Loans

You might qualify for a stated income loan if you don’t have a W-2, are between jobs, or are an investor. Stated income loans have a fast and easy application process, making them a popular option for investors who are in need of quick cash and may not be eligible for other loans. However, they do have some?perceived drawbacks. Let’s take a look at a couple of these “drawbacks” and what they really mean.

Likely Defaults

Many people liken stated income loans to the “liar loans” that were common before 2008. Back then, borrowers often didn’t need to show?any documentation to qualify for a stated loan; they only needed to ensure the lender that they were going to make enough money to pay it off. This led to many borrowers defaulting on their loans. Thanks to the Dodd-Frank Act, this practice is now illegal. It still happens occasionally, but you can avoid it by only working with lenders with good reputations and who require proof of income. (Click Here To Learn More)