Do you remember the time when real estate financing is when you saved up enough to put 20% down on a house, and then you got a mortgage loan for the other 80%? Well, you can still do that, but there are many more options now. Below are just a few of the options.
Gifting programs. Builders fund foundations that give you a portion of the down payment in some parts of the country so that you can get into a home with as little as 3% down payment from your own pocket. This has been approved of or allowed by FHA and other lenders.
What are FHA loans. While they don't actually loan the money, the Farm Home Administration guarantees your loan for the bank, so they can loan up to 97% of the purchase price, depending on the particular FHA program.
VA loans. If you have been in the armed services, have a decent job, and can save two or three paychecks, you can probably get a home with a VA loan. Land contract. Also called "contract for sale" and other names depending on the part of the country you are in, this just means that you make payments to the seller instead of a bank. It's up to you and them to negotiate downpayment amount, interest rate, and the term of the loan.
What are seller-carried second mortgages? Some banks will allow you to have as little as 5% into a home purchase, but will then only loan you 80%. For the other 15%, the seller can take payments on a second mortgage from you.
State housing programs. Something that nearly all states have is some sort of financing help in the form of a loan-guarantee program or outright loans for low-income buyers.
What are family loans? It may not be out of charity that a brother or a friend lends you the money to buy a home. Looking awfully good if ever their money is just sitting in the bank at 2% would be a 7% return.
Manufacturer loans. Some manufactured-home companies are arranging financing with 5% or less down for their buyers. They must feel their money is secure, since a good modular on a piece of property is nothing like a mobile home on a rental lot.
What about credit cards? This one is risky but if you have a low-interest credit card then you can use it to come up with the down payment especially if you can pay it off soon with a coming tax refund, for instance. Banks generally won't allow this, but you can combine this with seller financing.
Do you think there are more ways to approach real estate financing? You bet. This was just to get you thinking.
Gifting programs. Builders fund foundations that give you a portion of the down payment in some parts of the country so that you can get into a home with as little as 3% down payment from your own pocket. This has been approved of or allowed by FHA and other lenders.
What are FHA loans. While they don't actually loan the money, the Farm Home Administration guarantees your loan for the bank, so they can loan up to 97% of the purchase price, depending on the particular FHA program.
VA loans. If you have been in the armed services, have a decent job, and can save two or three paychecks, you can probably get a home with a VA loan. Land contract. Also called "contract for sale" and other names depending on the part of the country you are in, this just means that you make payments to the seller instead of a bank. It's up to you and them to negotiate downpayment amount, interest rate, and the term of the loan.
What are seller-carried second mortgages? Some banks will allow you to have as little as 5% into a home purchase, but will then only loan you 80%. For the other 15%, the seller can take payments on a second mortgage from you.
State housing programs. Something that nearly all states have is some sort of financing help in the form of a loan-guarantee program or outright loans for low-income buyers.
What are family loans? It may not be out of charity that a brother or a friend lends you the money to buy a home. Looking awfully good if ever their money is just sitting in the bank at 2% would be a 7% return.
Manufacturer loans. Some manufactured-home companies are arranging financing with 5% or less down for their buyers. They must feel their money is secure, since a good modular on a piece of property is nothing like a mobile home on a rental lot.
What about credit cards? This one is risky but if you have a low-interest credit card then you can use it to come up with the down payment especially if you can pay it off soon with a coming tax refund, for instance. Banks generally won't allow this, but you can combine this with seller financing.
Do you think there are more ways to approach real estate financing? You bet. This was just to get you thinking.
No comments:
Post a Comment