Taking out a mortgage is the traditional way to finance a home. There are many types of mortgages, offering a variety of options for buyers. You can apply for a fixed rate loan, like a 15 or 30-year mortgage, or a variable rate mortgage like an adjustable rate mortgage (ARM). However, there are other home mortgage alternatives that provide a variety of options.
You should start by selecting a home mortgage that best fits your financial situation. But first, ask yourself if a mortgage is even the right option for you.
Another important question to ask is whether you are qualified for a home mortgage. In this economy, mortgage lending companies have become even stricter with their requirements after the housing crisis over a decade ago. Borrowers need to have a high credit score and be able to have quite a bit of upfront cash necessary for the down payment to qualify for a mortgage in most cases.
Fortunately for the people who do not want to go down the mortgage route or who just can’t qualify for a mortgage, there are other ways to be able to own a home.
Here are three home mortgage options to consider:
Borrow against your life insurance policy
As you make payments on many whole life insurance policies, they will increase its cash value over the years. The dividends and interest that you earn will also go toward increasing the insurance policy’s cash value.
As the principal of that life insurance policy, most allow you to borrow against its cash value. Since technically that money is already yours, you do not need to go through a loan qualification process. You should check the interest rates and determine if it is competitive enough.
Borrowing against your insurance policy to finance a home mortgage can be tricky because it will affect the value of your policy. Only do so if you think you can repay the loan.