Concern About Stated Income Mortgage Loans
REM #F695
By Ilyce R. Glink
Summary: A lender touches base with Ilyce about loan options for people with a high debt-to-income ratio. Asset/Stated Income products can help, but be very careful about predatory lenders.
Q: In a recent column, a couple wrote in with a problem about how they couldn’t
buy more investment properties because of their debt-to-income ratio.
They were having trouble getting financing.
I am a mortgage lender and there are plenty of loan products that don't require the traditional debt-to-income and loan-to-value ratios. They are called “Stated asset/Stated income” loan products. The couple will probably have to pay a little more for the loan but at least they would be able to purchase more investment properties.
A: Thanks for your letter. Stated income products are okay for some people
but I worry about recommending them because they're often abused by predatory
lenders.
I've found that when you send folks out looking for stated income loans, and
they don't know how to avoid predatory lenders, it's like asking them to post
a "Scam Me!" sign on their back.
Because my columns reach a general audience, of whom many are not that educated
about the loan process, I try to opt for a more conservative approach.
But you're absolutely right. Asset/Stated Income products could help someone
who wants to buy another investment property but whose debt-to-income ratios
are all messed up by the depreciation.
I still feel that if someone is that highly leveraged in investment real estate
properties, they would be better off developing a long-term relationship with
a local lender who specializes in commercial lending.
Thanks for taking the time to write.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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