A recent Bloomberg report listed 15 small lending firms that are offering slightly riskier mortgages. They may come with higher interest rates and larger down payment requirements and they may not be backed by the government.
As the larger banks tighten their credit standards over the last few years, smaller banks and local community based banks are starting programs for borrowers who have higher debt burdens or who had sold a home for less that the outstanding mortgage. Making smart loans to people who don’t fit in the mold doesn’t make them a worse risk.
Some lenders are working with debt-to-income ratios up to 55 percent, and interest-only loans when borrowers have “high disposable income” or “high income potential” due to their line of work.
My experience in Sarasota, Fla. is that there are some community banks that will tailor loans for individuals with assets. These portfolio loans allow the bank to be flexible enough to provide different structures to individuals who don’t fit the guidelines of the larger banks. Some smaller banks in our area are many times the first to provide new programs with down payment assistance provided by community programs.
I am not a financing expert but I certainly know people that are. For the next Women’s Council of Realtors program we have brought in an expert to discuss financing options that Realtors need to know about for their customers. Call me at 941-726-2227 if you have questions or if you want me to connect you with one of my resources for “financing out of the box.”