When it comes to stated income loans, you may find it is easier to obtain them than to obtain any other type of loan. This is because you apply for the loan based on the amount of your income without having to jump through hoops to prove it. A loan like this one can be a real lifesaver if you don’t qualify for a conventional loan. There are a few significant benefits of stated income loans, as well as a few downsides to getting one.
Benefits Of Stated Income Loans
Stated income loans are ideal for those who are self-employed. Many people that work for themselves find that their income fluctuates from month to month. This can make it difficult, if not impossible, to get approved for any other kind of loan. In the case of stated income, the person that decides whether or not you can afford the loan is you. Making this decision is contingent on determining if you can pay back the loan based on a schedule set by the lender. But if you decide you can handle paying back the loan, it will likely be processed quickly, making it different from almost any other loan.
Disadvantages Presented By Stated Income Loans
There are some major disadvantages to taking out a stated income loan. One is that the interest in it is usually astronomical. At any rate, you will almost always pay a higher interest rate on it than a conventional loan would ever have. If you get in over your head, it can be extremely easy to default on this type of loan. Getting approved for a loan you can’t pay back will always do more harm than good.
Who Uses Stated Income Loans
The people that use stated income loans the most are generally those who purchase properties and need to do so in a hurry in order to avoid losing the purchase to someone else. The real estate industry can be extremely competitive and a stated income loan falls in line with that. For more information on this type of loan, please contact Capital Funding Source.