The term “alternative mortgage” typically refers to securing a home loan that doesn’t conform to the traditional standards set by government-sponsored agencies like Fannie Mae or Freddie Mac. These alternative mortgages are often sought by borrowers who may not qualify for conventional loans due to unique circumstances or financial profiles. Here are some steps to consider when looking for an alternative mortgage:
- Understand Your Financial Situation: Before seeking an alternative mortgage, assess your financial situation. Be prepared to explain why you need an alternative mortgage and how it benefits you.
- Research Alternative Mortgage Types: Different types of alternative mortgages are available, such as Non-Qualified Mortgage (Non-QM), Portfolio Loans and Hard Money Loans.
- Document Your Financial History: To apply for an alternative mortgage, you’ll need to provide detailed documentation of your financial history. This may include bank statements, tax returns, proof of income, and other financial records.
- Be Prepared for a Higher Interest Rate: Alternative mortgages often come with higher interest rates than traditional mortgages due to the increased risk for lenders.
- Seek Professional Advice: Before committing to an alternative mortgage, it’s advisable to consult with a financial advisor and a real estate professional to ensure you understand the terms and potential risks associated with the loan.
- Be Patient and Persistent: Securing an alternative mortgage may take longer and require more effort than getting a traditional mortgage.
Remember that alternative mortgages can be riskier and more expensive than traditional loans. Make sure you’re comfortable with the terms and fully understand the financial implications before proceeding.
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