Don’t like your mortgage broker .. make a switch!

For years, banks have been the traditional mortgage lenders. You simply apply for a mortgage at the bank you already have accounts in or compare the interest rates and terms in other banks. However, what happens if you don’t qualify? Whether it’s your credit history (or lack thereof) or the inability to afford a down payment, know there is a way out.

The good news for you is that banks aren’t the only financing source of mortgages. These options are best explored with the help of a mortgage broker, as they know where to go. Once they find entities that are willing to take higher risks than traditional banks, you’ll easily get a non-conventional loan. Read on to explore these additional financing options or watch the video on my Youtube channel which covers this topic.

Reasons for changing your financing source

As the mortgage industry has grown more competitive in the past few decades, we’re seeing a plethora of financing options when it comes to choosing a home loan. And although a non-traditional financing source is usually associated with high risk, it’s doesn’t always have to be the case. Take a look at the most common reasons why you may want to switch to one of the out-of-the-bank options.

First of all, there are the financial criteria – here we mostly think of bad credit reports. Do you have a few debts which weren’t paid in a timely manner? Banks won’t care whether it’s because of a difficult time in your life or just a result of innocent oversight. Because of that, they might decide you’re not a good candidate to extend credit to. That’s where non-bank lenders step in to fill the void. They are more willing to turn a blind eye on your poor credit history and give you a second chance.

Then, some people may be in a temporary situation when their income is currently lower than it will be in the future. Non-bank lenders will find a way around this and tailor their services according to your personal needs, being more accepting of your situation.

Furthermore, your loan application will probably be processed much faster, allowing you to speed up the pre-approval process as well. All things considered, with an unconventional financing source, it’s easier to find peace and tranquility which is so rare during the home buying process.

Seek professional advice

For most people, buying a property is a serious decision and the biggest purchase of their life. However, no matter how much you’ve researched the topic on the Internet, professional help is necessary. This especially holds true if you’re buying your first home and have never dealt with real estate before. Don’t fall into the trap of thinking you’ll save money by going the DIY route. While it may be so momentarily, in the long run, a broker’s advice is invaluable.

It’s the same when you’re moving – is it better to consider renting boxes made from plastic than use cardboard boxes? Yes, cardboard boxes may be cheaper, but are they as versatile and eco-friendly? That’s why you should make the decision which will be wiser in the long run.

How to tell if a broker is reliable?

Keep in mind that your broker should be proactive, share their advice and knowledge and be your guide during the process. It should be someone who has been following real estate trends for years and has a year-to-year comparison of the market that you might lack. You don’t want a passive broker who will scroll Zillow for you – you are perfectly capable of doing that yourself.

When it comes to NYC, you’ll want someone who’s local and knows all five boroughs, like Imma, Broker Owner of Tyler Vincent Real Estate Inc. Conveniently located in Carroll Gardens, she will provide you with free consultations that are of immense value. There’s no reason to go in alone when you can have all the benefits of professional help by your side.

 What kind of financing options are there?

Depending on your individual situation, your broker will make sure to match you with the right financing source. Among the plethora of options, here are three of the most popular ones to give you an idea:

• Full-feature home loan – This flexible loan comes with all the features for your needs. Whether it’s additional repayments that will enable you to pay the loan quicker or reduce the amount of interest, you can have the whole package.
• Low doc home loan – This type of loan is the best option if you are self-employed or unable to prove your income through traditional means.
• Split rate home loan – This kind of loan allows you to pay one half of your loan at a fixed rate and the other at a floating interest rate.
• ARM loan – Otherwise known as an adjustable-rate mortgage, it provides the option of changing your rate periodically.

Are non-bank mortgages safe?

There are many misconceptions around nontraditional financing sources such as non-bank mortgages. Banks as government institutions are widely recognizable, hence people instinctively feel they are more safe and trustworthy. On the other hand, out-of-the-box options may seem obscure as they don’t carry the same status or brand recognition as the big shots. That right there is the core of the unfounded belief that they are not to be trusted.

In reality, borrowing from these unconventional sources carries the same amount of risk. The important thing is to do your homework before approaching any lender. Look for those that are regulated by credit laws, not connected to bank failures and those that seem safe while researching their options. However, gut instinct isn’t enough if you don’t have enough knowledge, so it’s best to let professionals help you in this endeavor.

 

Contributing Writer – Betty White