What everyone ought to know about income status
December 14, 2006 | Mortgage | 
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When applying for a mortgage you will be asked if you can provide proof of your income. W2 employees would provide last 2 years W2’s and year to date pay stub. What is requested if you can’t provide this?
There are various loan programs that will allow for reduced documentation to enable borrowers to qualify when income documentation may be a problem. Here are the various categories the lenders use:
Full Documentation: 2 years W2’s, + year to date paystub, + 2 months asset account statements?for employed borrowers. 2 years business bank statements for self employed. Lenders will allow 50-75% of sole proprietor deposits to count as personal income for self employed borrowers.
Stated Income / Verified Assets (SIVA): This is for borrowers that make more than they can prove. It allows the borrower to state how much they make without having to provide?proof. Employment status is verified but the amount earned is not. Asset statements are?provided to qualify?reserves.
Stated Income / Stated Assets (SISA): This will allow borrowers to state their income and their assets without having to provide documented proof. Again, employment status is verified.
No Income / Verified Assets (NIVA): In this category the income section of the application is left blank. Job status is not requested or verified and income is not stated…it is left completely blank. Assets are verified.
No Income / No Assets (NINA): That can also be classified a NO DOC loan. In this category all income and asset information is left blank. This requires “A” rated credit due to obvious increased lender risk.
The more you can document the more you will save in interest rate and fees.
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[...] Documenting income?is as important as a?good credit score if you want to qualify for the lowest rates and costs when applying for credit. Being able to provide FULL DOCUMENTATION will save you significantly and many lenders make it easy to qualify as FULL DOC by accepting bank statements in lieu of W2’s for self employed borrowers. However, those who can’t meet these requirements have been applying under STATED INCOME guidelines and this could open problems later. [...]