On Friday, we took a quick look at "no-doc" or "low-doc" home mortgage loans. Today we will take a closer look at one of these types of home loan: the stated-income home mortgage.

What is a stated-income home mortgage?

A stated-income home mortgage is mainly what it sounds like. You state your income, in a signed statement and backed up by some proof, of what your income is. Here is what MSNBC Money Central has to say about who can benefit from a stated-income home mortgage:

Stated-income mortgages are for people who
make the money they say they make, but that amount doesn’t show up on
the bottom line of their income taxes, says Hugh McLaughlin, president
and CEO of KMC Mortgage Services Inc., a lender and broker in Naples,
Fla.

"They work for cash. They might be cleaning people or
people who work in restaurants," McLaughlin says. "It is also good for
self-employed borrowers who actually make gross sufficient amounts of
income, but write off a lot on their taxes. They have the capacity to
pay the loan back, but what they file with the IRS doesn’t reflect
their real income."

Even though this type of home mortgage falls under the category of "no-doc" and "low-doc" home mortgage loans, it does require some documentation. Often, profit and loss statements are necessary, as well as showing your tax returns. And you may need a statement of assets and liabilities associated with your business.

Realize that with such loans, the interest rate will be higher. Someone looking for stated-income mortgage loans will pay about half a point above another borrower with comparable information. However, it could be even higher, depending on how stable your income looks and your credit score.

Tags: no doc home mortgage loans, personal finance, financial planning, finances,
financial goals, stated-income home mortgage loans, =home mortgage loans, home mortgage