Back to Glossary
Stated Income Mortgage
January 19, 2023
A stated income mortgage is a form of house loan distinguished by its low regulation. It did not compel lenders to check or request income documentation. Banks and other lending organizations are just required to know the borrower's "stated income." As a result, stated income loans are sometimes referred to as "liar loans." This is a broader term for mortgages that need little or no documentation. The loan provider underwrites the loan based on the information provided by the borrower. They now appear to be dangerous, which is understandable. However, these loans were initially designed to assist self-employed borrowers with unpredictable income who could not provide the papers required for a traditional loan. However, liar loans mainly rely on credit ratings to compensate.
Related Topics
Payment and Debt Ratios
Home Value: Appraised, Estimated, Actual
How Much of a Mortgage Payment Goes to Principal
What Do Underwriters Do?
What Does Loan Underwriting Mean
Loan To Value and Down Payments
What is Underwriting in Real Estate?
Homeowner's Guide: DIY Home Improvement