Has the dust settled yet from the downfall in the sub-prime mortgage market? It is of my opinion that obtaining a stated income or no doc mortgage will become much more difficult over the next few months. Getting a stated income or no doc mortgage has changed greatly in the last few months. Lenders have increased credit score requirements and have made it much more difficult for home buyers to qualify for these loans.

In 2006 some borrowers could get as much as five hundred thousand dollars from some lenders on a stated income mortgage loan with a credit score of 580. It seemed at one point that just about anyone could qualify for a mortgage. Can you believe a borrower that cannot document his or her income could get 100% stated income financing on their home purchase with a credit score just above 580? I often thought that soon will come a day of reckoning on all of these loans. It is of my opinion that mortgage brokers or mortgage lenders that qualified their clients with low credit scores for these programs were setting up the clients to continue their poor credit history.

When stated income home loans became available twenty plus years ago, they were designed for the self employed borrower that had difficulty qualifying for a full documentation mortgage program. In those days the borrower not only was required to have an excellent credit rating, but they were also required to have at least a twenty percent down payment. this program was very successful and had very few defaults in payments from borrowers.

Now here it is the year 2007 and foreclosure is at the highest levels ever. My advice to home buyers is that if your income is hard to document, you have a good credit history and you can truly afford the mortgage payment on the home that you wish to purchase, a stated income or no documentation mortgage is an excellent choice.

However, if you wish to use a stated income mortgage program because you can't qualify for a full documentation loan due to lack of gross monthly income requirements, you are headed in the direction of jeopardizing your sound financial future. Living a realistic life is much more comfortable.

Glenn Keller is a veteran Florida mortgage broker and is associated with 1st Continental Mortgage of Florida in Saint Augustine, Florida. To learn more about buying a home with an stated income or no doc mortgage, visit his website at http://www.bretlinfloridamortgage.com

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