Alternative Mortgage Program Summary
- Borrowers should be aware that alternative mortgage programs almost always charge a higher interest rate and closing costs than traditional mortgage programs. You should review the terms of these programs very carefully before moving forward.
- An alt-a mortgage is a term used in the lending industry to describe a category of mortgages that fall in between prime mortgages and sub-prime mortgages
Asset Depletion Mortgage
- Asset depletion mortgages enable borrowers to use liquid assets to qualify for a mortgage
- Asset depletion mortgages are good for borrowers with relatively minimal income but significant liquid assets
Bank Statement Mortgage
- With a bank statement mortgage the borrower provides monthly bank statements instead of their tax returns, W-2s or pay stubs to verify their monthly income
- A bridge loan is a short term loan used to purchase a property
- A bridge loan is typically refinanced or paid off when the property is sold, prior to the end of the loan term
Hard Money Mortgage
- A hard money lender lends money to people who cannot get a mortgage from traditional lenders such as banks, mortgage banks, mortgage brokers or credit unions
No Documentation Mortgage
- With a no documentation mortgage, borrowers are not required to submit any personal financial documents to verify their income, assets or employment
- No documentation mortgages are typically used by self-employed borrowers or borrowers who primary source of income is from assets or investments
- A second mortgage, also known as a second trust deed, is a second mortgage on a property that uses the existing equity in the property as collateral for the loan
- The second mortgage is subordinate, or junior, to the first mortgage on the property
Stated Income Mortgage
- A stated income mortgage does not require borrowers to provide personal financial documents such as tax returns and pay stubs to verify their income
The table below outlines multiple programs that are alternatives to traditional mortgage programs. These programs may be useful for borrowers who have special financial circumstances or who are unable to qualify for a traditional mortgage with a traditional lender.
Just like with a traditional mortgage, borrowers should review proposals from three-to-four lenders to make sure they select the mortgage with the lowest rate and fees. The table below summarizes the programs. Click on the program title to learn more about each program.
Use the FREEANDCLEAR LENDER DIRECTORY to find private money lenders in your state