Stated Income Mortgages Explained: Who Qualifies & Who Doesn’t

If you’re self-employed, a contractor, or paid in a way that doesn’t fit neatly into a T4 box, you’ve probably heard of stated income mortgages—and wondered if they’re legit or just too good to be true.

The short answer?

They’re real, they’re helpful, and they’re not for everyone.

Let’s break it all down in plain English.

What Are Stated Income Mortgages?

A stated income mortgage allows you to state your income instead of proving it strictly through traditional documents like T4s or standard employment letters.

This doesn’t mean lenders just “take your word for it.” Instead, they look at the overall picture—your business, your bank statements, your credit, and your equity—to decide if the income you’re stating makes sense.

These mortgages are commonly used by:

• Self-employed business owners

• Contractors and freelancers

• Commission-based earners

• People with strong cash flow but lower reported taxable income

Who Qualifies for Stated Income Mortgages?

Here’s where things get interesting. Lenders offering stated income mortgages are flexible—but not reckless.

You may qualify if you have:

• ✅ Solid credit (usually 600+ depending on the lender)

• ✅ Consistent business or self-employed income

• ✅ Healthy bank deposits that support your stated income

• ✅ A reasonable debt-to-income ratio

• ✅ Enough equity or down payment

Lenders want to see that your lifestyle and bank activity support the income you’re claiming.

Who Does NOT Qualify for Stated Income Mortgages?

Stated Income Mortgages Aren’t a Fix for These Situations

Stated income mortgages are not a loophole if:

• ❌ Your credit is very poor

• ❌ Your bank statements don’t support your stated income

• ❌ Your business income is brand new or unstable

• ❌ You’re trying to significantly inflate income numbers

• ❌ You have too much unsecured debt with weak cash flow

If the numbers don’t make sense, lenders will walk away—fast.

Why Banks vs. Alternative Lenders See Income Differently

Traditional banks rely heavily on:

• Tax returns

• Net income after write-offs

• Very strict guidelines

Alternative and B lenders focus more on:

• Gross cash flow

• Business sustainability

• Real-world affordability

That’s why stated income mortgages often live outside the big banks—but still provide strong, legitimate options.

Is a Stated Income Mortgage Right for You?

It can be a great solution if:

• You earn good money but write off expenses

• Your taxes don’t reflect your true earning power

• You want flexibility without going private

It may not be the right fit if:

• You’re struggling with credit and cash flow

• Your income is inconsistent or declining

• You’re looking for the lowest rate at all costs

The right move always depends on the full picture—not just income.

Final Thoughts

Stated income mortgages aren’t shortcuts—they’re alternative solutions for non-traditional earners. When structured properly, they can help you buy, refinance, or renew without forcing you into a box that doesn’t fit your reality.

If you’re unsure whether this option works for you, a quick review can save you months of frustration (and multiple declines). Let's connect to go over your options.