If you need a loan that will not require you to provide necessary documents as proof of income, then the stated income loan will be the solution. This is the loan instrument that is seen by many as perfect for mortgage borrowers. The reason behind such is that current mortgage rates will affect the financial stability of the borrowers. Thus, debtors will need to find funds to facilitate and process their needs in order to get their dream houses. Now, whatever debt instruments they are, they will still need some information. The stated income loans will, of course, not request any document as proof of the income.
With the debts now in place, you need to ask whether there are certain benefits and disadvantages to the loan applications. As a start, the biggest advantage that the loan will bring to the borrower is that they are much faster to process than other loan types. Technically, this is because of the fact that requirements will be quicker to provide. It also means lesser paperwork for the lender to sort through. If the borrower is in a hurry to buy a property, then it would be better to go through this type of loan.
For the self-employed applicant, this will also be of a great advantage. More than often, if you are self-employed, you will not have updated records and benefits. The best way to work out a loan if you do not have the statement is the stated income loans. These individual who own their businesses are treated by lenders as high risks. The reason is that there is the possibility these borrowers will not succeed with their ventures and will not be able to pay off the debts in time.
If the loans will have its advantages, there will also be disadvantages. The first would be the presence of very high interest rates. The reason behind the higher rates of interest is the fact that these are high risks loans. People who have no proof of income may be understood as over estimating their profits simply to get the money they want. The rates are also proof that these debt instruments can lead into a cycle to borrowing in order to cover up the existing payments for the loan. Another disadvantage is that borrowers will have a harder time trying to find that lender who will offer the money to them.