If a traditional mortgage isn’t on the table because you are self-employed, or don’t
want a traditional mortgage at current rates, there are other ways to pay for a home
when a traditional mortgage isn’t a good fit.
Collateralize your investment portfolio. These loans, known as investment
credit lines, asset-based loans or margin loans allow you to borrow against
securities you already hold in your brokerage account. There are no
application fees, closing costs and your credit score isn’t considered. It is
strictly based on your assets. This is beneficial for buyers who don’t want to
sell their assets to avoid paying capital-gains taxes, are self-employed or
want to avoid a bridge-loan while selling their current house.
If you own other property, consider a cross-collateral loan. By taking a loan
on multiple properties, the lender can mortgage both properties to secure
the loan, and private mortgage insurance is not required.
Another alternative financing option is to liquidate assets. This would allow
you to pay cash and close quickly. This can be a taxable event—you’ll have to
pay income tax on money you withdraw from a 401(k),