Alternative Home Loans To Consider
You’ve probably already heard of traditional mortgage loans, but a world of alternative options awaits you. It would help if you listened to these unique options for a home. The following are three loan options you may have yet to learn about.
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Zero Credit Score Loans
It’s true that most mortgage lenders review an applicant’s FICO score and base their decisions on only the number. However, some flexible lenders offer zero credit score mortgages to people eager to purchase a home.
These particular loans are designed for individuals who need a credit score to grade. That may be because they have yet to apply for credit or open accounts. The good news about that is that lenders have the option to do things manually. With a no-credit score plan, the lender can look more closely at your stability documentation, like your stubs and current lease. If you can show a lender that you can pay your mortgage monthly with no problems, you might qualify for such a loan.
Low Credit Score Loans
Low credit score loans are something you have never heard of about mortgages. They are designed for people struggling with lower-than-normal credit scores. For example, FHA lenders usually require their applicants to have scores of at least 580 points. This program might allow you to gain approval for a home with a score as low as 550 points. You could get a dream home because the underwriting department will manually inspect your income and documentation. They may approve you if everything else in your situation seems doable.
Reverse Mortgages
A reverse mortgage is an entirely different type of loan. Instead of borrowing money from a lender to purchase a house, you can use some of the equity in your current home to pay yourself a regular salary. You must be a senior citizen of 62 years of age to qualify for such a loan. It’s an excellent opportunity to supplement your income if Social Security needs to pay you more or you have a large purchase in mind.
The mortgages mentioned above are only a handful of the many options available. The best course of action is to start by contacting a Colorado home lender and asking if they can assist you with your process. You can then work with that provider if you feel comfortable with their reputation. Hire them if the answer is yes.