When it comes to buying a home, you have various ways to go about it. One of the best ways to purchase a home is through a mortgage. But, there are various types of mortgages you can choose from. Other than the conventional home loan, there are also alternative mortgages.
An alternative mortgage is a mortgage that does not conform to the standard rules and guidelines of a conventional mortgage. An alternative mortgage might be suitable for you if you cannot get a conventional mortgage, if you want a faster closing period, or if you can get a better rate outside the conventional mortgage rules. But just like conventional home loans, most alternative mortgages require a minimum down payment of 20% or more.
Who Is An Alternative Mortgage Ideal For?
An alternative mortgage is a perfect option for many people, especially those that have been declined by the banks. This option is also ideal for borrowers with a lower credit score. In addition, an alternative mortgage can help borrowers secure affordable funds they require right away to purchase a home because the process is much faster.
Reasons That Make An Alternative Mortgage a Better Option
Here are three reasons that make an alternative mortgage a better option.
1. Quicker Access To The Loan
Alternative mortgages are usually quite different from traditional mortgages in terms of the application process, flexibility, approval, etc. One of the major differences is the fact that you will be able to get the money into your account faster. When it comes to bank loans, there is a lot of paperwork involved, and they also have a multi-business-day period that must take place before the funds are deposited into the borrower’s account. These can delay the whole process. Thankfully, these delays rarely accompany an alternative mortgage, meaning you will get your mortgage as soon as possible.
2. Higher Chances Of Approval
The most significant benefit of getting an alternative mortgage is that there is a higher chance of getting approved. When it comes to traditional mortgages, there are plenty of requirements that one has to meet to be approved. For instance, you must have a higher credit score, provide proof of income, etc. So borrowers with a lower credit score are more likely to be denied a home loan. Fortunately, this isn’t the case with an alternative mortgage. This type of lending is based on the property’s equity, and the requirements for approval are less strict. Even borrowers with a lower credit score can still qualify for an alternative mortgage.
3. Less Paperwork
It is no secret that traditional mortgages require a lot of paperwork that can be overwhelming. That’s because the bank requires detailed tax returns, proof of assets, employment verification, and so much more.
When working with the best private mortgage lenders these requirements are significantly reduced, if not completely eliminated. They will not require an endless pile of papers to approve a borrower.
Another major benefit of working with a private lender is the flexibility in terms of loan terms. Traditional mortgages have strict rules regarding what type of home you can purchase. With private lenders in Vancouver, there are no such rules. You can purchase a home, condo, vacation home, or even a commercial property. There are no limits.
Whether you’re interested in home equity loans in BC, mortgage renewal, or simply getting a new mortgage, working with a knowledgeable mortgage broker can help make the process much easier. With so many different mortgage products and options available, there’s a risk that you might choose the wrong mortgage product, or not get the best deal available. A mortgage broker will work with you to understand your financial situation and goals, and then help you find the right mortgage product for your situation.