A type of reduced documentation mortgage program which allows the borrower to state on the loan application what their income and assets are without verification by the lender; however, the source of the income is still verified.
Investopedia Says:
SISA loans usually fall into the Alt-A classification, and may carry a higher interest rate than a prime mortgage. Self-employed borrowers often use SISA loans because their tax returns might not reflect that actual cash flow they have available to pay their mortgage. Other borrowers might use a SISA loan because their income comes from sources which are hard to document (such as tips in the food service industry). Some lenders may require the borrower to sign a form authorizing the lender to obtain a copy of the borrower’s tax returns from the IRS should the borrower default on the mortgage.
Related Links:
We walk through the steps needed to secure the best loan to finance the purchase of your home. Understanding Your Mortgage
We explain the calculation and payment process as well as the amortization schedule of home loans. Understanding the Mortgage Payment Structure
