Three Ways to Pay for a Home If a Traditional Mortgage Isn’t on the Table

Cash isn’t the only option if you don’t want or can’t qualify for a regular home loan

By Robyn A. Friedman

If you’re shopping for a luxury home, what can you do if you are self-employed or highly leveraged and won’t qualify for, or don’t want, a traditional mortgage? 

Many buyers simply pay cash for their homes. According to ATTOM, a property-data provider, 33.12% of all sales nationally of single-family homes over $1 million in the second quarter of 2023 were cash deals. 

But there are other ways to pay for a luxury home when a traditional mortgage product isn’t a good fit. Here are some creative alternatives to consider. 

Collateralize your investment portfolio.

These loans, known as investment credit lines, asset-based loans or margin loans, allow you to borrow against the securities you already hold in your brokerage account, whether they are stocks, bonds or alternative investments. The advantages, according to Michael Silver, a certified financial planner in Boca Raton, Fla., are that they have no application fees or closing costs, no financial documentation is required and your credit score and debt-to-income ratio aren’t considered. “It’s strictly based on your assets,” he said. “So, if somebody is highly leveraged or if they’re high-net worth but have bad credit, none of that matters.”

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