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Comparing Conventional Loans vs. Alternative Lenders

Comparing Conventional Loans vs. Alternative Lenders

When faced with the decision of whether or not to buy a home, alternative mortgage financing can make that decision much easier for the average homebuyer. While the Federal Housing Authority and the housing industry itself have created a stigma surrounding the daunting task for first-time home buyers, defining what exactly a conventional versus a non-qualified mortgage to the masses is actually quite simple. The specifics of what homebuyers are applying for could create optimism within the housing market, and opportunity for both borrowers and lenders.

Breaking down the tradition

A common misunderstanding about conventional mortgages is that these loans are not federally guaranteed. “Down payments can be as low as 3% but qualifications are tougher than for FHA and other government home loans,” according to NerdWallet. From a professional standpoint, conventional loans are far riskier because they’re not guaranteed by the government if a buyer defaults. 

Conventional mortgage borrowers typically make larger down payments than FHA borrowers, and they tend to have a more secure financial standing and are less likely to default.

All about the credit score 

The average required credit score is typically at least 620 to obtain a conventional loan, and 740 is typically the minimum score you would need to get a good mortgage rate. Unless you feel pressured into maintaining excellent credit, there is no need to maintain a high credit score. A low credit score should not stop you from shopping for homes. Conventional lenders will make exceptions and can work with borrowers to bring their credit up before they close on a home.

Alternative loans for the modern buyer 

Angel Oak Mortgage Solutions was founded to provide alternative mortgage financing options for wholesale and correspondent mortgage borrowing needs in today’s home financing environment. Larger bank lenders choose to focus and fund only the wholesale mortgage loans that are the safest. Non-Qualified Mortgage (Non-QM) is any home loan that doesn’t comply with the Consumer Financial Protection Bureau’s existing rules on Qualified Mortgages (QM). Usually this type of correspondent mortgage loan accommodates people who are not able to prove they are capable of making the mortgage payments. 

Angel Oak Mortgage Solutions is unique in its offering of non-agency correspondent mortgage lending solutions for mortgage correspondents nationwide. 


About Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions offers non-Agency wholesale mortgage financing options and specialized low-credit wholesale alternative mortgage solutions for brokers throughout the country. We provide brokers mortgage access for low credit consumers, even after a bankruptcy, default, or delinquency. We also provide a unique application flexibility for alternative mortgage applicants when applying for home loans. The technology platform our wholesale alternative lending process is built on allows for paperless submission and the ability to track loan status with the click of a button, and our streamlined operations encourage quick response times, allowing for dependable communication and decision-making.

Angel Oak Mortgage Solutions is comprised of a team of qualified non-prime mortgage professionals who provide wholesale nonprime mortgage lending programs specifically for consumers whose circumstances may not meet standard Agency financing guidelines. With alternative lending services available to brokers in more than thirty states, Angel Oak Mortgage Solutions is proud to serve as your team of non-agency mortgage lending specialists. 

Angel Oak Mortgage Solutions currently offers non-prime wholesale mortgage loans in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, Nevada, North Carolina, Oklahoma, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.