Date Posted: August 23, 2017
On this episode of CTV Morning Live's Mortgage Minute, Frank Napolitano comes on to discuss the Alternative Mortgage. An alternative mortgage is typically a mortgage suited for someone who may have been declined by a major "A" bank/lender, whether for bruised credit, income/new-self employed individuals and other various situations which may not fit most lenders' guidelines.
Getting into home ownership can be tough, especially with trying to do so with bruised credit. Typically, getting into an alternative mortgage should be a short term solution. Ultimately, the goal for someone going into an alternative mortgage would be to help get their credit situation recovered enough to renew or refinance them into a standard mortgage.
However, an alternative mortgage may not always be the best scenario for someone in a tough situation. In some cases, it may be in your best interest to spend some time renting while ensuring your credit recovers and paying off additional debt which could be stopping you from qualifying for your dream home.
Getting stuck in an alternative mortgage, which typically comes with interest only payments, long term, can actually cause more harm than good. With higher rates than standard mortgages, you can spend years paying an interest only payment and not building equity in your home.
Speaking with a Mortgage Broker can help determine whether putting your home ownership dreams on hold, or going into an alternative mortgage is the better decision you should do.