There are a few key differences when it comes to comparing standard and stated income loans, even though both of them require a source of steady and reliable income. Stated income loans typically require a high credit score, and they also need a large down payment that standard loans do not always require. You’re also going to need to provide the loan officer with proof of assets. Standard income loans typically only require your previous tax return, two-years worth of employment proof, asset statements, and pay stubs.
- A standard loan requires document verification for every part of the borrower’s stated fiscal data.
- To that end, borrowers will need to furnish pay stubs, going back a month.
- Borrowers must also provide W2s, detailing the last two years of employment, or tax returns if self-employed.
“They have to make sure that you make enough money to cover not only the housing payment, but also any other monthly debts, such as your credit cards, car payments, or student loans.”