What CRE Investors Should Know About Stated Income Loans
If you are a commercial real estate investor (CRE), you likely need financing for your investments. A stated income loan might be one solution to your financing needs. These loans may be especially convenient for purchasing owner-occupied property, but they could also be perfect for CREs. Before you apply for such a loan, you should have a basic understanding of how this kind of loan works. Here is an overview of the major points you should know.
Definition of a Stated Income Loan
Essentially, a stated income loan is a type of mortgage that does not require as much documentation as other types of loans. When you apply for this kind of loan, you must still state your income and assets on the application. However, these details will not be verified by the lender. The lender will still verify the stated source of your income though.
Be aware that not all of the applications for these loans are the same. The requirements vary from lender to lender. If you apply for a stated income loan from multiple lenders, be prepared for different application formats.
You Might Pay More
Because you do not need to provide or verify more detailed documentation, you might have to pay more for this type of loan. The risk is higher for the lender, so the extra risk may be extended to the borrower via a higher rate.
Don’t Try to Falsify Information
Although the information you provide might not need to be backed by certain documentation, don’t try to falsify facts. If the information on your application seems inconsistent or unlikely, a lender might still check to see if it’s true. Additionally, you will typically need to provide current tax records.
If you are a commercial real estate investor, you may wish to consider a stated income loan. Today’s investors have more options to consider than ever – so don’t hesitate to consult Growth Lending Group for solutions.