'Do Stated Income Loans Imply Fraud?'

If you have good credit, but not enough income, and you're looking to buy a house, your loan officer may have suggested a "stated income" loan, where you just say how much money you make, but don't actually prove it. Some lenders call this a "liar's loan", but those guys are not to be trusted, since they're plainly telling you to lie.

If such loans meant there was an assumption of mistruth, they would not be offered. These loans are for people who may have non-traditional income, such as from overseas, or self-employment where you're able to write-off a large percentage of your income, or if you have irregular income.

If you have a high-paying commission job, banks won't count your real, true, actual income for at least two-to-three years. On stated income loans, you can count it right away, because you know your income better than they do.

You'll pay a small premium for this type of loan, since the bank really is taking a risk with it, but if you have good credit and truly know you can afford it, you aren't lying, and you won't go bad on the loan, even though you don't want to bother "proving" your income.

Beware though, if you go into foreclosure, and the income you stated isn't defensible, you may get in big, big trouble, and you may lose your house and freedom alike. So seriously, keep it believable. The guidelines are here to protect you too.

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