According to the new mortgage rules, there are some specific criteria which separates people who should and shouldn't be eligible for home loans funding. If due to any reason, you are not getting eligible or your lender denies for approving your application...there are certain alternative ways to find out.
Please check below the alternatives for obtaining funds to finance your home – buying :
1. Smaller banks
The first option is smaller banks. Financial institutions like credit unions & smaller banks having $2 billion or less total assets or less than 500 mortgages may not require to follow the conventional rules of lending. But you must consider that these small lending banks might charge high interest & service charges than big lenders. This happens mainly when your loan amount is small. The small banks have to consider various costs which remains intact in both case's of small loans and big loans, like a title search.
2. Finance by State housing authority
The next important option of funding your home buying is getting a loan from State Housing Authorities. You often get a rate of interest which is below the current market rates, or you might just have to put down as low as 3% of the total loan amount. However, you might have to consider a full financial education course and a statement showing the complete breakdown of your income.
3. Government aided loans
You can not use more than 43% of your income to pay off your debt. If you have too mush debt to settle or comparatively low income, then your DTI (Debt to income) ratio will also be low. In this case lenders won't entertain your loan application.
But you can can go over the 43% limit only if you are applying for Federal approved loans like - Fannie Mae - Freddie Mac, FHA loans, VA loans, or the U.S. D.A guaranteed loan programs.
4. Home ownership stabilization organization/Foreclosure Prevention Program
After getting your mortgage, there might be a situation that you will owe more than your home's net value. This is called going underwater on mortgage. But there are some programs which can aid you in this critical moment. you can get help from a home-ownership stabilization organization or get a loan from a foreclosure prevention program. These organizations or loan programs do not consider the new mortgage rules & always try to give a helping hand to the distressed homeowners.
5. Non-Profits lenders
Low & moderate income holders can get help from non-profit community development lenders. There is a limit of 200 loans per year, if these lenders are making more than that, they can not provide the program. As these lenders create special loan programs for helping & development of their community, & also they are doing it without earning any profit, they are not bound to follow the conventional lending rules.
6. Temporary financial help
If you have enough amount of money in your bank account as deposit, the bank might might appoint for you a personal finance manager. Ask this person & get the advice for refinance when required. This person will manage your finances & communicate with the bank in order to arrange a loan for your fund. As you have already have a handsome account balance in that bank, it will desperately try to retain you & will give you it’s priority customer services.
Let’s just say, if your DTI, is above the allotted limits, & you are using maximum share of your income towards debt pay off, you will certainly not be eligible. But if you have enough money in form of assets, your personal finance advisor will provide an evidence that you are capable of paying your monthly payments in spite of high debt-to-income ratio.
7. Safe loan option
If you want to shift from a unsafe/dangerous loan through refinance, your lender might not have to obey eight standards of mortgage loan. The borrower will be exempted from the ability to repay standards. It will only happen if his/her lender would move the borrower from below given situations :
- Due to an adjustable-rate mortgage, the rate of interest is going to adjust to a higher rate of interest.
- In case of an interest-only loan.
- The situation, where the amount you will be paying to the lender is going up even you are making the full payment. This situation is popularly called - loan with negative amortization etc.
8. Other type of special loans
There are some other type of mortgages where the conventional mortgage loan rules or lending rules do not apply. Specifically these loans include timeshare loans, reverse mortgage, open-ended loans etc. If you can opt any one of these above given options, you do not have to worry about the lending rules anymore.