If you're a homebuyer who has alternative income sources, you may have difficulty getting approved for a traditional mortgage. But this doesn't mean that you can't buy a home – there are many different types of home financing services available to people in your situation.
Here are five of the best options for homebuyers with alternative income sources.
A renovation mortgage is a type of loan that allows you to finance the purchase of a home as well as the cost of renovating it. This type of loan is perfect for homebuyers who want to make some improvements to their new home before moving in. Renovation mortgages are available from many different lenders, and they usually have lower interest rates than traditional mortgages. Importantly, many renovation mortgages are provided in cities that have excess housing stock, so the housing stock can be revitalized; they may have fewer requirements than traditional loans.
A rent-to-own lease is a great option for homebuyers who don't have the money to buy a home outright. With a rent-to-own lease, you agree to rent the home for a set period of time, and at the end of the lease, you have the option to buy the home. This type of lease is a great way to build equity in your home, and it usually has lower interest rates than traditional mortgages.
Hard Money Lenders
Hard money lenders are businesses that lend money to people who don't meet the requirements for a traditional mortgage. This type of loan is perfect for homebuyers who need to buy a home quickly, or who don't have the credit score to get approved for a traditional mortgage. Hard money lenders usually charge high interest rates, but they can be a great option if you need to buy a home fast.
Online Mortgage Companies
Online mortgage companies are a great option for homebuyers who want to get a mortgage without dealing with a bank. These companies offer mortgages with low interest rates and no hidden fees. They also allow you to apply for a mortgage online, which makes the process quick and easy. Many of them are more flexible with income requirements. Ask if they do 1099 loans.
No Doc Home Loans
A no doc home loan is a type of mortgage that doesn't require you to provide any documentation about your income or assets. This type of loan is perfect for homebuyers who don't want to share their personal information with a lender. No doc loans usually have high interest rates, but they can be a great option if you don't want to share your financial information with anyone or just don't have the documentation to share.
Choosing the right home financing service can be tricky, but it's important to do your research before you decide. Talk to a few different lenders and ask them about their products. Be sure to read the terms and conditions of each loan before you sign anything, and don't be afraid to ask questions.
For more information, contact a local lender, like FNCB Bank.