In the years 2002 to about 2007, borrowers with little verifiable income and credit scores as low as 580 could get “stated income” loans with no money down. In other words, borrowers could obtain 100% LTV loans, with no verifiable income and sub-par credit. Those days are gone for good, but borrowers looking for “no income verification” loans are resurfacing. Competitive “stated income” loans no longer exist.
There are only two types of residential loans that can be obtained without formal income verification: (1) Hard Money Loans; and (2) Asset Based Loans.
Hard Money or Private Money lenders often do not need to verify income in the traditional sense. But such loans are limited to 65% to 70% LTV, and the rates and fees for such loans are high (10% to 11%, and 4 to 5 points).
Our “Asset Based” loans allow borrowers to “state” their income based on an amount imputed from their overall liquid asset amount. Liquid assets consist of stocks, bonds, cash, etc.; liquid assets do not include real estate or personal property. Borrowers derive their income by amortizing their liquid assets at 5% over 30 years, or until age 80, in most cases. Borrowers usually need a $1 million or more in liquid assets to qualify for these “Asset Based” loans.
Unfortunately, many borrowers inquiring about “stated income” loans either do not want a Hard Money loan or do not qualify for an Asset Based loan.
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646