Other sources of money
B – Side of the lenders
Alternative lending –
Due to may unfortunate situations some borrowers miss the main stream lenders qualifying marks by only a few points. But that is not a serious situation as there are alternative products available for those who need them. Those products are generally referred to as Alt-A products.
Borrowers who have serious credit issues or past delinquency they do not qualify under Alt – A lending solutions. For those with bad credits the products are often known as B mortgages. We see these sources every day without even realizing it. As an example – You want to buy an electronic but you do not have the money. You go to your father and ask for $200. He gives you the money on a condition that – you will return the money after 10 days and mow the lawn for two days. That was a quick alternative source of money other than the regular banks.
Most of the banks have sister organizations which deal with B side lending but the reason is different there. Usually when a client does not qualify for money under regular mortgage underwriting guidelines then the client gets referred to a special guideline. That is called B side. The guidelines are a bit relaxed but the interest rates are high. There is a difference between this and a second mortgage. This is still a first mortgage we are talking about and the rate is higher. This is because the client has more risk.
Some examples of B lenders
- Pay-day lenders
- Relatives
- Peers
- Privet lenders
- Banks
- Different funds
- Many types of home equity loans