What is a stated asset loan? If you’re self-employed or don’t have traditional income documents, getting a mortgage can feel nearly impossible.
That’s where stated asset loans come in. These loans allow borrowers to qualify based on their declared income and assets; without the usual paperwork like tax returns or pay stubs.
But while stated asset loans offer more flexibility, they also come with certain risks and requirements. In this article, we’ll explain how they work, who they’re for, and what you should know before applying.
What Is a Stated Asset Loan?
If you’ve ever applied for a traditional mortgage, you know how much paperwork is involved. Lenders usually ask for your pay stubs, tax returns, bank statements, and employment history to make sure you can repay the loan.
But what if you don’t have a regular paycheck or your income isn’t easy to prove on paper?
That’s where a stated asset loan comes in. With this type of loan, you simply “state” your income and assets instead of proving them with full documentation. It’s meant for people who have money and good credit but don’t fit the traditional mold of a borrower.
How Does It Work?
When you apply for a stated asset loan, you tell the lender how much you earn and what assets (like savings or property) you own. The lender may not require your tax returns or pay slips, but they will still review:
- Your credit score
- Your bank account activity
- The value of the property you’re buying or refinancing
- Your down payment amount
In most cases, lenders still verify that the information you provide makes sense. If you say you earn $200,000 a year but your bank account is empty and your credit score is low, they probably won’t approve you.
Who Can Benefit From a Stated Asset Loan?
This loan is ideal for people who have strong finances but don’t have the kind of steady income that traditional loans require. It’s often used by:
- Self-employed people: Business owners or freelancers may have irregular income or take tax deductions that make their income look lower on paper.
- Real estate investors: Investors may own multiple properties and have rental income that isn’t easily shown on a tax return.
- Commission-based earners: Salespeople or agents who don’t earn the same amount every month may benefit.
- Retirees or high net-worth individuals: Those who live off savings or investments rather than a paycheck.
What Makes Stated Asset Loans Different?
Compared to regular loans, stated asset loans:
- Require less documentation
- Allow more flexibility in how income is reported
- Often have higher interest rates
- May ask for a larger down payment, sometimes 20–30%
However, they are not as common as they used to be, especially after the 2008 financial crisis. But they are still available through certain lenders, especially those who specialize in non-traditional loans.
Pros and Cons
Pros
- Fewer documents needed
- Faster approval
- It is also ideal for non-traditional earners
Cons
- Higher interest rates
- Larger down payment
- Stricter credit requirements
Is a Stated Asset Loan Right for You?
To know if this type of loan is the right option for you, ask yourself:
- Do I have good credit?
- Do I have strong bank statements or assets?
- Is my income hard to show on paper?
- Can I afford a larger down payment?
If the answer is yes to most of these, a stated asset loan might be a good option. But if you have a steady income and can provide documentation, a traditional loan might be cheaper and easier in the long run.
Tips Before You Apply
- Be honest: Never lie about your income or assets. Lenders can check and may deny the loan or worse.
- Compare lenders: Not all lenders offer stated asset loans. Find one who understands your financial situation.
- Know the costs: Ask about fees, interest rates, and repayment terms before you sign anything.
- Speak to a loan officer or broker: They can help you understand your options and what paperwork (if any) might still be required.
Final Thoughts
A stated asset loan is a useful solution for people who don’t fit into the standard borrower box. It gives flexibility to business owners, freelancers, and investors who have the money, but not the paperwork, to prove it.
Just remember, this kind of loan is not without risk. You may pay more in interest or be required to put down a large amount of money up front.
But if you’re financially stable and understand the terms, a stated asset loan can be a smart way to finance a home or investment property.
