Stated income loan programs had become a thing of the past in 2008 when the mortgage industry went through dramatic changes. However, there is a program from the past that is making a comeback. The Stated Income program is back. Although it is fairly conservative, it will help those who qualify.
Stated Income Guideline Highlights
- Max loan to value of 49.9%.
- 36 months of total debt service in reserves.
- Available for purchases, refinance, (both cashout or rate and term), 2 units or second homes
- There is no debt to income calculated and no employment required.
- 2 appraisals are required
- Loan amounts to $3,500,000
Who in Orange County will Qualify for Stated Income Mortgage Program?
This program is targeted towards the most qualified, high net worth individuals in California. The minimum FICO score for a purchase or refinance is 740. For those borrowers looking to pull cashout, the minimum FICO is 760. Borrowers need to have significant liquid reserves, totaling an amount equal to 36 months of the total debt service on the house. For example, if a homeowner in Newport Beach is getting a $2,000,000 loan on a home worth over $4,000,000. The total payment, including taxes and insurance, would easily add up to $15,000. The borrower would need to have over $500,000 in reserves after the close of escrow. Not all asset accounts are treated the same. For example, while a checking or savings account will be considered for 100% of their worth, a stock account (risky stock?) will most likely not have 100% of the current value counted towards the reserve requirement. If the borrower is under 59 1/2 then 60% of their IRA accounts do count towards the reserve requirement. Also, some business accounts can be used towards reserves.
The loan program can either be a 5 year or 7 year ARM. The interest rate is fixed for the initial 5 or 7 years before adjusting annually. The payments are based on a 30 year amortization, with interest only payments not allowed. The best part is that this is not a “private” or “hard” money program, which would have a high interest rate and big loan fees. This is a program provided through a local “portfolio” lender, a bank.
For specific qualifying information, or to have custom loan scenarios provided, make sure to contact a local Orange County, CA Jumbo Loan specialist.
Authored by Tim Storm, an Orange County, CA Jumbo Mortgage Loan Officer – Please contact my office at Emery Financial Group for more information about an Orange County, CA Jumbo Mortgage. 949-640-3102.
Contact us for your Orange County Jumbo Mortgage:
949.640.3102 | tstorm (at) Emeryfinancial.com