Stated Income On Construction Loans?

Due to the increasing value of finished properties, constructions loans are becoming more and more popular everyday. That’s why it is not strange that stated income loans for constructions have become available in the last years. As with other loan types it is possible to obtain a loan even if you lack the proper documentation to prove your income from top to bottom.

There are however requirements that you’ll need to meet in order to compensate for this lack of backing up documentation. These requirements are different for the self employed and for the employed. Yet, there is a common requirement for both of them that will determine approval or decline: a down payment or cash reserve as an alternative proof of income and guarantee.

Purpose of Stated Income Feature

The idea of stated income is not to let you be economical with the truth and state an income over your capacity so as to get better terms or get approved when you otherwise wouldn’t. Stated income is meant for those who have alternative sources of funds or intricate tax returns and deductions and thus cannot provide full proof of their actual income capacity.

Also, for those who have a job but other sources of income too, it is possible to get qualified for higher amounts and better terms. Some lenders will be willing to state your job as the source of income but take into account the additional funds so as to reach the loan amount or repayment program that you desire. This is especially useful for those that wouldn’t otherwise meet the requirements for approval.

Simple Documentation Requirements For Approval

There are no harsh approval processes for these loans. There are simple documentation requirements that can be solved in a matter of hours. You won’t be required to show proof of income and thus, no copies of your pay checks or tax returns (if you are self employed) will be required in order to get approved for a stated income construction loan.

Instead mere formalities are required, so as to make sure that you actually have income regardless of its amount. You’ll need a note from your Certified public accountant or your TAX preparer stating that you are self employed or a letter from your employer stating that you are employed. No reference to actual income is needed. The documentation is needed only to back up the income source, not the amount.

The Cash Reserve Requirement

In order to get approved for stated income construction loan, you’ll need to build a cash reserve to guarantee repayment of the loan if anything unexpected happens. The amount ranges from one lender to another usually equals to three months to a year of the monthly installments of the construction loan. The repayment program will also determine the amount of the cash reserve. Longer repayment programs will require higher amounts and shorter repayment programs will require lower amounts. Also, the borrower’s credit score and financial situation will be taken into account to define the cash reserve requirement. An excellent credit score and financial situation may entitle the borrower to bypass this requirement.

Bad Credit 24 Hs. Loans With No Credit Checks!

Bad credit 24 Hs. Loans have many benefits for slow credit applicants that can be easily recognized: They are suitable for those who have bad credit and they can be approved within less than 24 Business Hs. However, not everybody knows that there are Bad Credit 24 Hs. Loans that require no credit checks and are thus suitable for those with no credit at all and even for those who have past bankruptcies on their credit history.

The Bad Credit Issue

Those that have bad credit have problems obtaining financing due to the higher risk that lending to them imply. Bad credit loans compensate for the risk charging a higher interest rate but those with no credit at all have further problems as their risk cannot be assessed. And those with a past bankruptcy are usually denied access to credit whenever their credit report is pulled.

Some of these applicants do not want financing with high rates and prefer to improve their credit prior to applying for a loan. But others would want in certain situations to be approved for a loan regardless of the rate charged. For these situations and for these applicants, bad credit 24 Hs. Loans with no credit checks are the perfect solution.

Lack Of Credit Verification

Since these bad credit 24 Hs. Loans require no credit assessment, the applicant’s credit score and history is not an issue and those with bad credit, no credit or bankruptcy can easily get approved. The lack of credit assessment has unfortunately other consequences on the loans’ terms and requirements that can turn these loans into quite expensive financial solutions.

The lack of credit verification implies that the loan is considered a high risk investment and thus the interest rate charged (in the form of a fee) will be higher than that of credit cards and unsecured loans. Also, the loan’s payment schedule is quite short with only a couple of months for repayment at most and the amount of money you can obtain through these loans is limited to a couple of thousands.

Is it Advisable To Use Them?

In order to answer this question the applicant needs to analyze his or her options. If there are no other financial products available due to bad credit or urgency bad credit 24 Hs. loans with no credit checks can provide the needed funds within a minimum period of time suitable for solving the emergency but the applicant needs also to consider whether he or she will be able to afford the loan.

So when pondering the benefits and drawbacks of these loans the main issue to analyze is the possibility to obtain the funds through other means. The second issue is the affordability of the loan repayment and these two issues will define whether the applicant should apply for this type of loan or not. For those with bad credit, no credit and past bankruptcies on their credit history bad credit 24 Hs loans with no credit checks are usually their only chance to cover the need for funds during emergencies but due to the high costs, if other source of funds is available it is advisable to try it before applying for these loans.