Many people ask, "What is creative financing"? Creative financing can be described a number of various ways. One such way to describe creative financing is that it is financing that is not traditional. In other words creative financing is coming up with a way to finance a borrower through non-standard methods. One example of creative financing may be using a bank statement program for income documentation instead of traditional pay-stubs, tax returns and/or W2 forms. There are programs available that you can use 6, 12, or 24 months worth of your bank statements, add up the total deposits and divide this by the specified number of months and this total can be used for your average monthly income. Some of these programs work a little differently with various lenders so ask your mortgage professional if this may be an option for you.
Self employeed borrowers whose job does not require them to have a business license can sometimes get a letter from their CPA to verify them as self employeed. This is important when
Many times a one spouse may have credit issues and the other spouse may have have flawless credit. Consult with your mortgage advisor to see which programs can utilize the spouse with the higher credit rating to obtain better terms.
Another program that is considered creative financing is having a co-signer. There are some lenders with programs where if you have poor credit and can't qualify on your own, you can have a relative with good credit be a co-borrower on the loan even if they will not be living in the house. You can then qualify for a better rate and/or lower down payment using a combination of their credit and your credit.
Creative financing options can allow borrowers who have trouble documenting their income to qualify for a mortgage. Depending on your credit score, you may be able to state your income, and with excellent credit you may be able to qualify with no income and no assets documented at all.