Traditional bank-approved mortgages are becoming a thing of the past, as alternative mortgage lenders are quickly becoming the preferred method.
What does this mean? Simply put, non-bank lenders have stepped up to the plate and are expediting the home buying process, with a vast majority of the application process completed online.
The days of driving to the bank and applying for a mortgage are swiftly replaced with applying for a mortgage from the comfort of your own home.
Alternative Lenders at a Glance
There are several different types of mortgage alternatives. Credit unions are one type of lender and provide loans directly. They're known for having fewer fees and lower interest rates. They're not-for-profit and are member-owned.
Another choice is an online lender. The application process is fast, and you typically know within minutes if you qualify. Since everything is online, you can complete the electronic paperwork at your convenience.
Brokers operate differently. They work to pair you with a lender that fits your home buying needs. Some have offices you can visit to discuss your needs, and others are all online.
Regardless of what alternative mortgage lender you choose, unconventional home loans boast numerous benefits.
Benefits of Alternative Mortgage Lenders
With mortgage alternatives on the rise, it's no surprise that alternative lenders complete nearly 50% of all home purchases.
But what makes them stand out?
For starters, these alternative lenders can expedite the closing of your loan, often because of the swift application process. Some lenders can even close your loan in as little as 15 days.
With a seamless, streamlined process, you can get approval for a mortgage in a matter of minutes.
Break Free From the Chains of Bad Credit
If you have credit that's not so spectacular but still dream of owning your own home, then alternative mortgage lenders may be the solution you seek. This is primarily due to the housing crisis.
Federal lawsuits and stiffer regulation have made banks hesitant to provide mortgages to those with lower credit scores.
This is especially true for FHA loans since they typically assist people with low credit scores or who are first-time homebuyers.
Some of the smaller alternative mortgage lenders aren't governed as strictly and provide FHA loans when banks shy away. They make purchasing a home an attainable dream.
Choosing the Lender That Works Best for You
Whether purchasing your first or fifth home, there are countless reasons to use alternative mortgage lenders.
They provide efficient, prompt, and convenient service, often online. You can quickly apply for a mortgage without having to leave your house, and know within minutes if you qualify.
Purchasing a home is an exciting experience, and choosing a lender that best fits your needs can make the process easy and convenient. Read our guide and learn all about the ways you can benefit as a first-time homebuyer, and you'll be closing on your first home in no time.