Real Estate Mortgage Loan Information

• Full Documentation: Both income and assets are disclosed and verified, and the income is used in determining the applicants ability to repay the mortgage.
• Stated Income - Verified Assets: Income is disclosed and the source of the income is verified, but the amount is not verified. Assets are verified and must meet an adequacy standard such as, for example, six months of stated income and two months of expected monthly housing expense.
• Stated Income - Stated Assets: Both income and assets are disclosed but not verified. The source of the income, however, is verified.
• No Income - No Assets: Neither income nor assets are disclosed.
• No Ratio: Income is disclosed and verified but not used in qualifying the borrower. The standard rule that the borrowers housing expense some specified percent of income is ignored. Assets are disclosed and verified.
• No Income: Income is not disclosed, but assets are disclosed and verified and must meet an adequacy standard.
• Stated Assets or No Asset Verfication: Assets are disclosed buy not verified, income is disclosed, verified, and used to qualify the applicant.
• No Asset: Assets are not disclosed, but income is disclosed, verified, and used to qualify the borrower.
• No Income - No Assets: Neither income nor assets are disclosed.

A handful of banks offer the simplicity and convenience of Stated Income mortgages to borrowers with the same low interest rates as full documentation loans. Applicants must have good credit profiles, often with credit scores of above 720. There is usually also limitations on the subject property, such as no 3-family or 4-family houses.

If you qualify, generally the fast closings occur with stated income or no documentation required loan programs. As a rule of thumb, the more documentation provided, the longer it may possibly take t close the loan, however we are often able to lend you more money at a better rate if more documentation is provided.

If the broker working on the loan determines you can fit into a full doc loan vs. a stated loan the move is permitted to get a better interest rate. However if you have to go from full doc to stated once in underwriting that is not usually permitted.

Alternative Documentation can be the use of pay stubs, W-2 forms, and bank statements instead of Verifications of Employment (VOE) and/or Verifications of Deposit (VOD) to qualify a borrower for a mortgage.

The method of documentation that a lender's underwriter will perceive to have the lowest risk factor is W-2 income backed up by two years of actual W-2 statements and one complete month of paycheck stubs. The underwriter will want to be comfortable that they are issued by a legitimate company or organization. Pay stubs or W-2 statements that are handwritten rather than computer or machine generated will cause a red flag.

There are many types of "alternative" options. Some lenders allow bank statements in place of paystubs, some allow tradelines that do not appear on credit. There are many creative ways that your mortgage broker should know about to best help your situation.

Generally, the more documentation you can provide to the lender, the smaller the risk is to the lender, which in turn gives you a better rate.

A qualified mortgage professional will look at your whole financial situation and can make recommendations on that type of income will suit you best.