Alternative mortgage lenders could be the solution for your mortgage requirements. Many alternative lenders are similar to the major banks in terms of lending criteria and interest rates. Alternative lending usually means that the lender’s criteria are more flexible than the major banks. Alternative mortgage solutions can include mortgages for poor credit, tax liens, consumer protection plans or self-employed. Alternative lenders also called B-lenders or sub-prime lenders, including credit unions, mutual investment corporations, and even private individuals.
At the present time, alternative lenders are still a reliable source of financing for homeowners. Recent regulation by various levels of government has made it more difficult and expensive to get a mortgage. Economic conditions such as higher interest rates and falling house prices mean that many people cannot qualify for a traditional bank loan.
The best method to obtain an alternative mortgage is to talk to a mortgage broker. A mortgage broker should ask why you have not qualified for a bank loan and what your financial requirements are. Our brokers will then match your financial requirements with an appropriate lender. Our alternative mortgage specialist will ask for documentation regarding income, present mortgages, insurance and property taxes. Having complete documentation makes the mortgage process faster and usually results in lower interest rates.
There are some drawbacks to dealing with an alternative lender, which includes a larger down payment and higher interest rates. Many alternative mortgage lenders require down payments or home equity between 20% and 35%. The exact amount of down payment usually depends on the location of your property. Interest rates can range from 5.99% and up to 15.99%. The interest rate depends on your credit score, income, home’s equity and whether it is a 1st, 2nd or 3rd mortgage you want.
Most alternative lenders charge a fee for setting up the mortgage. The fees can range from as low as 1% and as high as 10%. The fee is a reflection of the risk associated with the mortgage. When a lender charges a low fee it is an indication that you have a low-risk mortgage. A lender fee of 10% or higher means the lender considered it to be a risky loan or the lender is simply reluctant to finance your mortgage.
Not all alternative lenders are created equal, some are very flexible if you miss payments. Other lenders will start legal proceedings upon the first missed payment. How do you choose the right lender for your mortgage? Ask your mortgage broker about the lender, exactly what are the lending terms, does the lender have a history of starting legal actions, and will the lender work with me if I miss any payments? Our brokers will be able to provide this type of information for you. We have a list of the best alternative, sub-prime and B-lenders to help you get a loan.
Since alternative lenders and non-bank lenders have flexible lending criteria, they can provide solutions when no other lender will help you. They can provide first, second and even third mortgages for people with bad credit or no income if you have enough equity. For situations such as a pending eviction, an alternative lender may have the best solution, since they can act much faster than a traditional lender.
To get the best alternative financing for your real estate or property please call one of our mortgage agents. To qualify for a non-bank loan you must have at least 20.0% equity in the property. We provide a free consultation and can quickly tell you if an alternative mortgage is the best financial option for you.