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Alternative Mortage Financing

There are many reasons why a person would choose to go with an alternative mortgage financing plan rather than the traditional ones. Perhaps he or she is applying for a loan with very bad credit or cannot afford the 20 percent down payment required for traditional home loans.


If, when applying for a mortgage loan, you cannot pay the required 20 percent down payment, you will need to pay for private mortgage insurance. This is to protect the lender in case the borrower 車位按揭 defaults on the mortgage. This cost can, however, add up in the long run, as well as increase your overall monthly mortgage payments.

This private mortgage insurance fee is not easy to remove, but not impossible. One option for you is to refinance your loan and pay off your original mortgage using the equity in your home as security for your second mortgage. The problem with this option is the fact that second mortgage interest rates are generally one to two percent higher than the first mortgages. However, depending on how much you will be borrowing and the length of your new loan, it might still be less than the amount you will pay with the private mortgage insurance.

Another problem with this option is the fact that in order to qualify for a second mortgage without an insanely high interest rate, you will generally need to have a FICO score of at least 680. A score any lower than that will cause you to be charged with a higher interest rate than you would probably like.

Buying a home is a very important step in a person’s life that requires thorough research and a lot of thought. You will need to look at all of your options before signing a contract that will commit you to a type of loan that will last for a long time.

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