The current low interest rate environment is making home-buying more affordable for those with limited capital to purchase property outright. But many Canadians are finding it difficult to qualify for a mortgage, either due to a low credit rating or another contributing factor. And so within this blog, we’ll review several alternative home loan options.
When the bank turns you down for a mortgage, it’s important to understand there are other institutions that can offer effective financing. Private lenders often have more relaxed guidelines than the major commercial banks, and they may be more willing to understand your personal circumstances when you’re applying for a loan. However, private lenders will likely require you to pay a higher interest rate than you would through a bank. So it’s important to review interest rates carefully before signing a loan with a private lender.
Seller financing is a process through which the seller and the buyer agree on financing terms directly without the assistance of a financial institution. This type of property transaction can become complex, and will require the help of a legal specialist in order to ensure you’re protected against possible legal issues and financial loss. Sellers who are finding it difficult to sell their property at their desired price-range might be more amenable to this type of financing.
Find a Co-Signer
Oftentimes, those with a limited credit rating might be able to convince the bank of their ability to finance a property if they use a co-signer. A co-signer could be a friend or family member who will use their financial status to back your ability to pay for the home. The co-signer will have to go through the financing process with the lender to prove they have the capacity to help pay for the loan should you be unable make payments.
By carefully assessing your options and speaking directly with an industry specialist, you can find a path to homeownership. The process might take time, but by completing your research you’ll be able to find a solution that helps you buy a home and protects your investment for the future. To learn more, contact my offices directly.