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Standard and Stated Income Loans: What’s the Difference in Guidelines?

While standard loan guidelines still require verification of your qualifications, some lenders do still offer stated income loans as well. With standard loans, you are required to provide documentation of your income, to include things like W2s and/or tax returns for the last two years, and recent paystubs and asset documents. Many lenders may then ask for more documentation as well, in order to be sure that you can afford your mortgage payments and also your other financial obligations. Stated income loans, when offered, will require proof of employment, a high credit score and a larger down payment, but not documentation to verify your precise income. The qualification rules have become stricter following the housing crisis.

Key Takeaways:

  • Many people think that stated income loans have totally gone away but that is not the truth because some lenders still offer it.
  • In standard loans one has to verify everything they say in the loan application, including providing proofs of what they state.
  • The minimum documents a lender will require for standard loans include paystubs covering the last 30 days of employment and asset statements for the last two months.

“While stated income loans don’t require you to verify your income, they do require you to verify every other aspect of your loan. Lenders have to do their due diligence to make sure that you can afford the loan and won’t default on it in the near future.”

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