How to Find an Alternative Mortgage and Why
If you want to get the best possible deal on a mortgage loan, consider exploring some alternative mortgage options. They can help you not only obtain a loan in the first place but also save money on interest rates.
When You Need an Alternative Mortgage
There may be several reasons why you don’t qualify for a conventional mortgage loan. These include:
- A low credit score. Most loans require a minimum credit score of 580 in order to apply for a loan.
- A high debt to income ratio. Keeping up with all your loan payments won’t guarantee mortgage approval. Generally speaking, a mortgage lender will reject your application if your debt to income ratio is higher than 50%.
- Past financial problems. Defaulting on a previous loan or applying for bankruptcy can make it hard to obtain a home loan even if your financial problems were not caused by mismanaging your income.
- Self-employment. Conventional mortgage lenders prefer applicants who have steady, predictable income month after month.
In other instances, you may be able to qualify for a conventional loan but only if you meet certain conditions such as putting down a large down payment. Alternatively, you may want to borrow more money than a regular mortgage company is willing to provide.
What are the Options?
Alternative mortgage lenders include mortgage companies that aren’t connected to a bank, credit unions, online lenders and even lending marketplaces. Some of these lenders specialize in offering certain types of loan to a niche market while others offer a wide range of home mortgage loan options. In some instances, alternative lenders offer conventional home mortgage loans but, unlike banks, are willing to consider unconventional applicants.
If you aren’t sure which alternative home loan is right for you, talk to a number of lenders about your financial situation. Bring any paperwork you have on hand to show that you can be trusted to manage your finances wisely. Be open to what a loan officer may recommend for your situation. In some instances, it’s better to work on improving your financial situation and taking out a loan later on than it is to obtain an immediate loan that may not offer good terms and conditions.
MIG is an alternative mortgage company offering a wide range of government and conventional loans. Get in touch with us by phone, online or in person to learn more about how to obtain an alternative mortgage loan to suit your needs and budget.