Alternative Loans Explained

Conventional loans are not the only way borrowers can get approved – alternative loans include non-conforming loans, stated income loans, Alt-A loans, portfolio loans, and others. Where conventional loans cannot provide purchasing power, alternative loans can work for the right buyer. 

Alternative loans are meant to assist unconventional borrowers to secure financing. Atypical buyers can include those who are self-employed, receive income from unconventional sources, don’t have established credit, have high debt-to-income ratios, credit struggles, or exhibit other unique life experiences that complicate securing a traditional loan.

For certain property types, it can be challenging to secure a traditional or government-backed loan; alternative loans are also useful in these cases. 

The requirements for alternative loans differ from those for conventional loans. Usually, they are more relaxed and do not make the same requisites. For example, buyers might not have to show all of their income sources or might be able to receive a loan even if their employment history is inconsistent or challenging to verify.

Some alternative loans include: 

  • Low Down Payment: Borrowers can apply for a low- to nonexistent down payment. Since there is no official governmental oversight, the requirements vary between lenders, but overall, the rules are more flexible. 
  • Credit: Buyers with credit issues (no credit established, short credit history, credit problems, etc.) can benefit from alternative loans. Usually, this happens when the borrower is very young or has no credit cards or other debt in their name.
  • Debt-to-Income: A high debt ratio to income can immediately disqualify a borrower for standard loans. Stated income loans are an alternative that does not subject the buyer’s income to verification. 
  • Employment: People who are self-employed, newly employed, promoted, career change, etc., might struggle to secure a traditional loan. In these cases, an alternative loan is best to get them into a house they truly love. 

The right lender can help you apply for an alternative loan. Work with an experienced mortgage advisor to ensure you fully understand the fine print and can be led in the right direction. 

Unconventional loans often include a higher interest rate; even with a good rate and adequate terms, it is important that borrowers applying for alternative loans are honest and truthful about what they can afford. 

Are you looking to secure an alternative loan? Contact the experts at EB Mortgage today. 

EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today!  

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/ 

Four Ways to Improve Curb Appeal

Making a first impression with potential buyers can be a hit-or-miss scenario. In today’s seller’s market, it’s important to hook buyers…but how? The simplest answer: curb appeal. 

Your home’s appearance can have a huge impact on how much money a potential buyer is going to fork over. Houses with a poor exterior sell for seven percent less than those that are polished and attractive, according to a recent study

Business professor Sriram Villupram at the University of Texas at Arlington programmed computers to recognize features such as trimmed shrubs, manicured lawns, and inviting flowers on more than 400 Google Street View images. 

Villupuram said, “The value of curb appeal could be as high as 14 percent during cold residential markets. This study also brings to light the value of homeowners’ associations and their covenants, which tend to maintain a uniformly positive curb appeal for the neighborhood as a whole.” 

Read on for seven tips and tricks for making your home more appealing to potential buyers.

Landscape
A 2019 survey of real estate agents found that well-landscaped homes sell between one and 10 percent more than those with no landscaping. Potted plants, window boxes, hanging planters, trimmed and edged grass, raked leaves, pruned trees, etc. are all surefire ways to boost curb appeal. If you have a patio or deck, don’t leave it empty. Add a bench or some chairs to invite buyers. 

Polish
Pull out your (or rent a) powerwasher and start cleaning your driveway, porch, siding, etc. Use some elbow grease and wipe all windows, clean walkways, handrails, and more. Sparkling clean windows let more natural light into your home, making it much more appealing. 

Replace
Swap out old light fixtures for new ones, paint (or replace) your front door, and add bright, LED light bulbs throughout your home to make it appear more refined. If your home has drab, old house numbers, replace those with new ones as well. Don’t overlook your mailbox, either! 

Upgrade
If your appliances are even slightly out-of-date, try updating some – or all – to give your home a sleeker look. If your home is not energy-efficient, consider upgrading windows, smart thermostats, light bulbs, and home appliances. 

Are you looking for a mortgage? You’ve come to the right place. Contact us today.

EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today! 

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

Do High Interest Rates Mean Cheaper Houses?

The housing market has never been as hot as the last couple of years. A combination of a low inventory, supply chain issues, and high demand has sent prices through the figurative roof at a record pace.

No longer bound to downtown offices, remote workers can save thousands on housing costs by migrating to the suburbs and beyond. The most significant contributor for those moving has been record-low interest rates on mortgages.

But with news that the Federal Reserve is raising interest rates on fixed-rate home loans, many are wondering if housing prices will fall as a result. Unfortunately, the truth is that the answer isn’t a universal one as some markets will see slow growth while others may not even notice.

Right now, the interest rate increase is driving demand from those who don’t want to miss out on locking in a low rate for the next 30 years. While higher lending costs tend to make buyers require a lower sales price, the focus has instead been on taking the plunge solely for the interest rates.

The interest rate of a mortgage makes a massive difference in the overall cost. For example, a $400,000 home at 2.8% will end up with about $200,000 in interest over the life of the loan. On the other hand, if interest rates hit 6%, the total interest paid would exceed $450,000. That’s an additional $250,000 for the same house, which is why buyers are so keen to snag the lowest rate possible.

Another area impacted by interest rates is the rental industry. If interest rates increase too much, potential home buyers may rent instead. This possibility has many looking to invest in rental properties with historically low rates.

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing team at Creative Programs & Systems: www.cpsmi.com.

Securing an Energy-Efficient Mortgage

There are plenty of reasons to have an energy-efficient home, one of which includes lower electrical bills. The Energy Efficient Mortgage (EEM) program from Fannie Mae, titled HomeStyle®, is a great way to go green, but what does it consist of, exactly? Read on to find out.

Energy-Efficient Mortgages are used to finance houses that are already energy-efficient (Energy Star-certified) or those that need energy improvements. These loans allow borrowers to qualify for a larger mortgage than they would otherwise.

Energy-efficient mortgages can be for purchasing or refinancing and allow approved borrowers to buy energy-efficient homes or pull cash out of their equity to fund energy-efficient repairs or updates to the landscaping.

Some energy-efficient improvements include:

  • Water efficiency devices
  • Renewable energy sources (solar panels, wind devices, geothermal)
  • Storm surge barriers
  • Earthquake foundation retrofitting
  • Brush and tree removal in fire zones
  • Mud and water retaining walls
  • Air sealing, insulation, windows, doors, etc.
  • Radon remediation

Energy-efficient mortgages can be financed for up to 15 percent of the appraised property value. There are a multitude of advantages when it comes to energy-efficient mortgages, including lowering monthly mortgage payments, decreasing utility bills, and offsetting your initial investment through the years.

Looking for loan options to meet your needs? Contact the experts at EB Mortgage today to learn how we can help you go green.

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EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at (616) 228-8797 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

Home Equity 101

The word “equity” is synonymous with home loans, but many people aren’t fully aware of what the term means. Have questions? We’ve got answers. Read on to learn everything you need to know about home equity.

Home equity is an asset; a part of your property that you own, it can fluctuate based on the property’s market value and how much of the loan balance remains. Your home is considered collateral for the loan given to you through the mortgage company.

To calculate home equity, subtract the overall property value by your loan balance. For example, if the loan balance is $150,000 and the property value is $500,000, the equity totals $350,000. Your Loan-to-Value (LTV) ratio is an equation used by lenders and can affect loan terms. LTV is a percentage calculated by dividing the loan balance by the property’s appraised value.

Equity can be accessed and used toward buying a new home or borrowed against and used for a cash-out refinance, Home Equity Line of Credit, or HELOC. Accumulated equity can be used to help fund retirement through a reverse mortgage.

To build equity, the property value needs to be increased while debt decreases. Significant improvements such as kitchen or bathroom remodels, new heating/cooling, landscape enhancements, smart home devices, new roof, etc., can add to the value of your home. Basic routine maintenance can also help in markets with increased redevelopment or job opportunities, as potential buyers are more likely.

Making monthly payments will steadily reduce your debt and build equity. If you make extra principal payments, your mortgage debt can be lowered even further. To pay less in interest over the life of the loan, you can swap a 30-year fix-rate or adjustable-rate mortgage for a 15-year fixed-rate mortgage. However, keep in mind this will increase your monthly payments.

Are you ready to invest in your home’s equity? Contact EB Mortgage today to get started.

EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 616-228-8797 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

Understanding DTI

Mortgage companies often require specific documents to analyze the borrower’s financial situation prior to approval. One of the most important aspects of getting approved for a mortgage is your credit score, which shows how well the borrower can meet their financial obligations. In addition to considering your credit score, lenders look at the borrower’s DTI ratio to determine whether they can monetarily handle a new loan.

DTI stands for Debt-to-Income and is calculated by adding all monthly debt payments together and dividing that by the borrower’s monthly income before taxes. DTI does not account for expenses not listed on credit reports, such as groceries, entertainment, and small purchases.

Lower DTI signifies a healthy balance between debt and income. The lower the DTI, the more likely the borrower can qualify for the loan they want. A DTI of 28 to 36 percent or lower is ideal; however, lenders accept higher DTI ratios depending on the type of loan, credit score, savings, and down payment.

There are two ways to lower your DTI ratio: decrease your debts or increase your income. To drive your debt down, pay off existing debt and do not accrue new debts. Increasing your monthly income can be tricky; try working freelance in your free time or find a better-paying job.

Are you thinking about purchasing a home and have a low DTI? Contact the mortgage experts at EB Mortgage today to get pre-approved for the house of your dreams!

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

What are No-Doc Loans?

Borrowers looking to get approved for a mortgage and cannot show income verification are perfect candidates for no-doc loans. This type of mortgage loan does not require tax returns or income verification.

To qualify for a no-doc mortgage loan, borrowers have to show adequate credit history, real estate investment experience, and liquid assets, which are all passed through underwriting.

No-doc loans are typically unregulated, so they involve elevated down payments over traditional mortgages. In addition to requiring a higher down payment, no-doc loans generally have higher interest rates as well.

For standard mortgages, borrowers are required to submit proof of income to qualify for a loan. Lenders determine this proof via W2s, pay stubs, employment letters, and/or recent tax returns. Borrowers should be able to prove they can afford loan payments through their source(s) of income. Down payments and credit scores are also relevant.

With no-doc loans, the paperwork load is significantly lighter. All the borrower needs to do is provide a declaration saying they can repay the loan. Generally, those who are self-employed, investment-wealth capitalists, immigrants, real estate agents, or temporary workers apply for these loans.

The Consumer Financial Protection Bureau (CFPB), a regulatory agency established by Dodd-Frank, says, “Your organization must verify the information you rely on using reasonably reliable third-party records. You generally cannot rely on what consumers orally tell you about their income.”

No-doc loan borrowers should have excellent credit scores and high cash reserves for down payments. Down payments are roughly 30 to 50 percent higher than traditional mortgages. The higher the down payment, the easier the borrower can be approved for a loan.

Using bank statements and other paperwork, the borrower can prove their capacity to the lender and qualify for a no-doc loan.

Do you need a no-doc loan? Contact the mortgage experts at EB Mortgage today!

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

Qualifying for a Mortgage While Self-Employed

Self-employed applicants looking to purchase a home will have to fill out the same paperwork as those not self-employed, and lenders look at the same aspects such as credit score, debt, assets, income, etc. So what’s the difference between a self-employed applicant and everyone else? When working for a company or business, lenders will verify the amount – and history – of that income to determine how likely you will continue to earn it.

Lenders are typically looking for the following:

  • Income stability
  • Location and business
  • Financial strength
  • Potential future revenue

To apply for a mortgage while self-employed, you will need to provide a few documents showing a history of uninterrupted income for at least two years. Employment verification will also be examined, which can include:

  • Client lists
  • CPA verification
  • Proof of licensing or other organization
  • Insurance confirmation
  • Doing Business As (DBA) documentation

Income documentation will also need to be ready to go. It’s crucial to show steady, reliable income for the past two years. Mortgage lenders generally look for:

  • Personal tax returns (W2s)
  • Profit and loss forms (Schedule C, K-1, Form 1120S, etc.)

If you have been self-employed for less than two years, to qualify for a mortgage, you’ll need to show that your business has been active for a minimum of 12 consecutive months. Additionally, your non-self-employment history will also be verified. Your training and education might go under the microscope to ensure stability will be gained by your success.

Check your Debt-to-Income Ratio (DTI), ensure your credit score is high, and separate your business expenses as well.

Self-employed and want to apply for a mortgage? Contact the experts at EB Mortgage today!

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

Early October is the Perfect Time for Homebuyers

If you have been eyeing a new home or thinking about buying, now is the time. Headlines skim past buyers as the seller’s market has been steaming hot. Bidding wars have been on the rise due to low mortgage rates and price appreciation. Thankfully, there are clear signs that buyer opportunities are increasing during autumn.

According to Realtor.com, the best time to buy a home in 2021, is the beginning of October. In a recent study, housing market trends were analyzed by experts. The past several years of data were looked at and applied to the current market.

Are you looking to cash in on the upcoming golden opportunity? Here’s what to expect:

Expanded housing supply: Total amount of homes for sale should increase. New listings typically come to market the week of October 3rd. A rough estimate stated that 17.6 percent more homes will be available than at the start of the year.

Less bidding wars: As more homes are available, the number of bidding wars will decrease. More options equal less competition and a better chance of securing the property.

Adjusted prices: As winter approaches, prices are tweaked and often reduced. While home prices are still appreciating, some houses will spike lower as owners are eager to sell. Owners might act with more motivation to achieve a sale prior to year-end.

If you are looking to buy a home, now is the ideal time. Your patience will pay off, and the home of your dreams is right around the corner.

Do you need a pre-approval to snag that fab new house? Contact the mortgage experts at

EB Mortgage today!

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.

How to Increase Your Credit Score Before Applying for a Mortgage

The higher the credit score, the better. This is a general rule of thumb for many aspects of life, especially when applying for a mortgage. If you have found yourself questioning your credit, here are some proactive measures you can take to improve it.

Increase your Credit Card Limit
A simple and effective way to boost your credit score is to increase your available credit. If you have credit cards open, all you have to do is raise the limit on them. In time, your credit scores should increase as your utilization lowers. You can increase your credit card limit over the phone or online through your credit card provider. The company might ask you to enter your gross annual income or housing payment. This process can take a minute or so but will need to be done at least three months prior to applying for a mortgage. Card issuers might need to access your credit report, which could temporarily affect your credit score.

Lower Your Credit Utilization
Credit utilization is the percentage of credit you are using at any time. A lower utilization rate (debt-to-income ratio) is typically what credit bureaus and mortgage lenders look for. With higher credit limits, as long as you are spending less (or the same amount before the limit was raised), your credit score will rise. If your credit card balances are low, your chances of being approved are higher.

Pay Off Existing Balances
Any prior loans or credit card balances that can be paid off or lowered will free up available credit. Since your minimum payment will be reduced in the process, your Debt-to-Income Ratio will decrease, giving your credit scores a boost. Smaller credit balances make way for your income to go toward a mortgage payment.

Work In Advance
Credit limit increases could result in a hard inquiry on your credit report. When these reviews take place, your credit can be slightly lowered. Thankfully, this is temporary, so try to go through with any of the above-mentioned strategies several months before applying for a mortgage. You can also ask your credit company to determine whether the application will result in a hard or soft pull on your credit.

What is your credit score? Learning and knowing this number is one of the first steps in gaining a mortgage. Contact the professionals at EB Mortgage today to walk you through the new home purchase or refinance process.  

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.