Alternative lending provides borrowing solutions for people who don’t meet the traditional mortgage guidelines when buying a home, consolidating debt, renovating, etc. This could be for a variety of reasons; however, the most common examples include:
Alternative lending scenarios are evaluated case by case given that everyone’s financial and property situation is unique. Accordingly, a common sense approach to mortgage underwriting is used to determine maximum borrowing amounts, terms and rates.
Typically, lenders require 20-25% equity / down payment as a minimum. Additionally, they’re very interested in the caliber of the property against which the mortgage will be secured. They’ll balance the latter with the overall financial profile to determine the what options are available.
Terms are typically 1-2 years with standard amortization periods, mortgage penalties, pre-payment flexibilities and more. At the end of the term, the goal is to transition you back to the traditional lending channels, whenever possible, to secure a lower rate.