With interest rates growing at an alarming rate, many consumers and investors are turning to creative financing solutions. Creative financing is a broad terms that means exactly what it sounds like. Rather than taking out traditional loans, consumers and investors are finding solutions in unique financing methods such as piggy-back loans and interest only loans.
Creative financing is often used to purchase a home. In this competitive real estate market, it can be difficult to secure a home loan, or make those high mortgage payments. Many financial institutions offer creative financing solutions to help higher risk customers get into the home of their dreams. Some of the most popular creative financing solutions include no money down combo loans, jumbo loans, and loan assumptions.
As with any major purchase, it's important to understand the terms of your creative financing solution. Just because the financing options are "creative" doesn't mean they're miracle cures for financial distress or insufficient funds. In the end, you still need to make payments on time, which means you don't want to get in over your head with balloon payments or monthly mortgage fees.
As more and more people practice creative financing, the need for regulation and accountability is evident. If you're you don't understand the terms of your loan or your credit card application, it's important to ask for help. It's always a good idea to run your creative financing plans past a financial advisor, accountant, or even a friend who has participated in a similar creative financing plan.
A Review of the Most Popular Creative Financing Options include:
- One month cost of funds index APR
- No money down combo loan
- 100 percent loan to value program
- Jumbo loan programs
- 90 percent loan to value cash out refinance
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