Trouble documenting your income?
For many people, it is difficult to document income for a variety of reasons. People who may be self-employed, commissioned sales people or those living out of the country, as examples, may not show all their income on tax returns. Others may use every possible tax break to lower their taxable income, which often makes it more difficult to get a loan.
In the past, stated income loans, or loans where your declared income did not need to be documented, helped these people better qualify for a loan. With the new government regulations under Dodd-Frank
these loans are much more difficult to get and often just for investment properties – but they still exist. Since the stated income loans were abused, and lenders and the country paid a high price for these defaults, now other alternative means have become a way to obtain financing.
Tax Return Alternatives
Bank statement loans are now an alternative to providing tax returns. Depending on the program, bank statements from 4 to 24 months can be provided and the income is derived from averaging the deposits made into the account. Depending upon the program, personal or business accounts can qualify.
Other programs allow for a simple letter from the CPA who prepares the borrower’s income tax returns, where the amount the CPA states in his letter is used to qualify the borrower’s income.
For seniors 62 and over, the FHA Government HECM backed loan
simply documents the borrower’s ability to pay property taxes and maintenance. Commonly known as the Reverse Mortgage, this loan product offers seniors several options, including no loan payments for life, and/or equity lines of credit. There are numerous incorrect assumptions about the HECM loans, which have given this loan product a bad reputation (high costs which Elite Financial has overcome by offering a no loan cost option and questions regarding title—the borrower always retains ownership—and survivorship—the borrower still leaves the asset to their designated heirs).
Alternative documentation or stated income loans
are still available to help consumers purchase or refinance real estate. Finding the most appropriate program and understanding everything about the loan are what Elite Financial does.
Elite Financial will help you understand your loan options so you can make informed decisions. Contact us today