There are many reasons why you many be interested in obtaining a stated income mortgage loan. Often these loans are requested by a borrower such as yourself when a person’s income cannot be verified. This may be due to self-employment or receiving cash payments for your work. Another common reason why a borrower may which to state their income on a loan request is because of the paperwork required for a limited doc or full documentation loan. There may be times when this paperwork is not available, or there may be times when a borrower would like to expedite the loan process by providing less paperwork.

As you can see, there are certain situations when a stated income mortgage loan can come in quite handy. In fact, you may wonder why anyone would ever provide a full documentation loan given the benefits to a borrower for a stated income mortgage request. The fact is, though, that when you apply for a stated income loan, often the interest rate you receive on such a loan is higher than what you would receive if you provided full documentation.

So why is the rate higher on a stated income mortgage loan? To answer this question, you have to understand the basic underwriting process a lender or bank will go through before approving your loan. Keep in mind that with a full documentation loan, the bank or lender is receiving all of the documentation necessary to ensure you have the ability to pay the loan back. This type of loan is therefore less risky to them from a lending standpoint than a loan request where you are simply stating your income without proving it.

You should keep in mind that other important factors can affect the interest rate, too. For instance, if you are looking for non owner occupied mortgage rates, these rates will also generally be higher as the property will not be your primary home. A stated income mortgage loan on a non owner occupied property may be a difficult loan to find, but underwriters for this loan request can generally use the rental income from the property during this underwriting process and so at least some income will be verified. As you can see, there are many factors that go into the underwriting process, and your final interest rate is often based in part on risk to the lender for making your loan.

The author has spent a lot of time learning about stated income mortgage loan and other related topics. Read more about non owner occupied mortgage rates at the author’s website.