Sometimes bad things happen to good people – Job loss, divorce, injury, medical problems can happen to anybody at any time. When these types of things happen, they can take a financial toll and they often have a negative effect on credit. In these situations, regular banks are usually not able to help. So, what can you do?
If you have some credit issues like late payments, collections, judgments, past due income taxes, etc but have made your mortgage payments on time over the past 12 months, our Alternative Lenders might be the solution to get you back on track with a reasonable interest rate and small fees.
Terms usually range from 1 to 3 years and the interest rates vary, depending on your situation but you can expect to pay at least 1% higher than you would for AAA lending rates. Alternative lenders will typically finance up to 80% on a Purchase and up to 75% on a Refinance, again depending on your situation.
While these lenders will overlook some credit issues, they are very fussy on the property. The property must be in or near a major city or town. It cannot have any negative influences such as being on a major highway or next to a graveyard or a commercial area. The home must be completely finished and not under renovations. These lenders will always require a full appraisal at your cost.
Private Lenders do not have to follow the banks’ rules. So, our Private Lenders can do whatever they want with their money, they are much more flexible and can often tailor a solution to meet your needs, if you have sufficient equity. Generally speaking the Private Lenders can finance up to 75% of your home’s value, depending on your particular situation and where your home is located..
Clients who cannot qualify for bank financing or alternative mortgage financing may be able to use Private Lenders as a short-term “stepping-stone” to get themselves back on track. Private Lenders usually offer mortgages with a 1 or 2 year term with interest only payments. We need to show the Private Lender there is an “exit strategy” at the end of the term. Therefore, you need to be able to repair your credit or employment situation by the end of the term.
Private Lenders typically charge a rate between 6.99 and 11.99% and have a fee or between 5% and 10% of the loan amount, depending on your situation. The fee is paid up-front, but there is no penalty to pay off the mortgage before the end of the term. Private Lenders do both 1st and 2nd mortgages.
Re-establishing your credit
It is important that you work on re-establishing your credit so that you can improve your credit rating and we can help you get another mortgage at a better rate in the future.. A Secured Credit Card is a great way to re-establish your credit. Call us and we can discuss some options for a secured credit card application for you.