Every day people are turned down by their favorite banks, and lenders due to bad credit or other circumstances. These are often hard working individuals with good income, enough savings for a down payment, and a desire to own a home. Unfortunatley for these people, banks usually don’t look any closer than your credit score before they turn you down.
There are other options out there.
Improve your Credit
This one is obvious! The first thing the big banks will usually tell you is to fix your credit and come back to them once you have. There are plenty of companies and services out there who will help you plan financially to target your credit problem areas and fix where things went wrong. Unfortunatley this can take a year, two years, maybe more.
Careful planning and the right spending habits can get you back on top of your credit game, but it may be too late if you had a specific property in mind.
So what are your alternatives? Let’s take a look.
The Federal Housing Administration (FHA) is specifically designed to help low-income individuals and households get a home loan. These loans are great, for those who qualify, but if your income is too great, you may not even have a chance to apply. Your best bet is to find and contact an FHA lender and start the process.
So what if you don’t fit the FHA requirements for low-income household?
Your next and only option is simple.
Hard Money or Private Money Loans
Hard Money and Private Money are interchangeable and have also come to be known as alternative financing or creative financing. Such loans are funded by individuals looking to fill a gap in the market place. They are private investors who want to help borrowers get that home or investment property they want, without having to wait for their credit to improve. Typically they need only see steady income and a good down payment to approve.
The rates for Hard Money and Private Money loans are generally higher than conventional mortgages and even subprime mortgages, in order to compensate for carrying greater risk. Hard Money and Private Money real estate finance program qualifications also will not turn you away for a bankruptcy, difficult-to-prove income or bad credit.
Short Term Financing
Hard Money and Private Money loans are often set-up with an “exit strategy,” so the Borrower can plan to refinance down the road and receive a better rate after solving any credit issues. These types of loans are often designed for shorter term financing, such as for real estate investors looking to buy property to remodel and rent for extra income or for individual homeowners looking to consolidate debts and bills by refinancing.
At Sun Pacific Mortgage we aim to help any Home Buyer or Home Owner who is looking for more options than the subprime lenders, traditional banks and FHA lenders have to offer. We work directly with the Borrower and Investor to find a loan strategy that works for you!
If you are interested in refinancing or buying property in any of the beautiful counties of California: Sonoma County, Napa, Marin, San Francisco, etc. then give us a call at (707) 523-2099 for a free consultation and let us help you get that home or investment property you’ve been hoping for.