When I apply the loan for my investment property, my broker will ask me if I want to do full doc or stated income? Full doc require full job verification, income proof (W2), tax return in past 2 year, 2 months bank statement to verify source of down payment , etc to show the lender you're fully qualified for the loan. The interest rate is more advantageous when full doc is used. However, in some case, when the broker see that full doc is not possible. Stated income is used. This mean the income is merely stated and no proof required. The interest rate in Stated income is usually 0.5 pt to 1 pt higher than the Full doc, but the process is much simpler for borrower to get approved. Stated income is very popular during the last 2 year when market was HOT. However, due to recent sub prime market hit, many lenders has tighten the guideline and disallowed many stated income loan. The bank see the stated income loan are too high risk. I think this restrictions will further depress the already slow real estate market.
Saturday, September 22, 2007
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1 comment:
I really think this a very good time for the prepared homebuyer to negotiate the price and get better due, it is time to buy but not time to sell.
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