Stated
income loans are often regarded as a boon to the commercial real estate
investors. They act as an alternative to the people whose loan requests have
been rejected by traditional banks. One of the major reasons why people avail
stated income loans is the red tape factor of qualifications and criteria to be
met by a loan borrower set by the traditional banks. So what exactly is a commercial
stated income loan?
What are
commercial stated income loans?
Stated
income loans are the loans that are provided based on the income which is
'stated' by the borrower and does not require the borrower to have an overwhelming
credit score or an amazing financial history. It is best suited for people who
derive income from varying sources and do not have any consistent cash inflow
patterns. These commercial stated income loans are provided only based on the bank statements and will
not involve any verification on the previous financial history of the borrower.
This makes it one of the major reasons why people avail stated income loan.
Here's all
you need to know about commercial stated income loans:
1) No proof
of employment required
In order to
avail stated income loan, you do not have to provide any proof of your
employment. Banks or even private money lenders are only interested in looking
at your bank statements for their security reasons of determining if you have
the loan repayment capacity. Thus, this is a 'Go-To' loan if you do not have
any particular source of income and your sources vary from time to time.
2) It is
best suited for people who derive income from other sources, different from
income from business or profession
Many real
estate investors do not derive their income from the business or profession but
derive income from different sources like renting out a property, sale of a
property, capital gains and so on. Since these incomes do not have any regular
pattern or consistency in occurence, stated income loans will be the right kind
of loan.
3) Stated
income loans require bank statements and tax records
Since there
is absolutely no check on the previous financial history or the credit score,
banks or a private money lender will ask you to provide your bank statements
and tax records for their verification and security purposes.
4) These
loans can be arranged very quickly
Since there is very less paperwork involved, these
loans can be arranged very quickly within a short period of time. Hence, it is
the best fit for people who are in need of immediate Finance.
