Creative Real Estate Financing Methods

Creative Real Estate Financing Methods

Creative Real Estate Financing Methods
This is​ the​ age of​ creative real estate financing .​
Maybe you remember when financing meant you saved up enough to​ put 20% down on a​ house, and​ then got a​ mortgage loan for​ the​ other 80%? You can still do that, but there are many more options now .​
Here are ten of​ them.
1 .​
Second mortgage loans from sellers .​
Many banks will allow you to​ have as​ little as​ 5% into a​ home purchase, but will then only loan you 80% .​
The seller can take payments on a​ second mortgage from you for​ the​ other 15%.
2 .​
Manufacturer loans .​
Manufactured-home companies are arranging financing with 5% or​ less down for​ their buyers .​
This can be as​ little as​ $2,500 down if​ you already have a​ lot to​ put the​ home on.
3 .​
State government housing programs .​
Most states have some sort of​ financing help in​ the​ form of​ a​ loan-guarantee program or​ outright loans for​ low-income buyers.
4 .​
VA mortgage 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.

5 .​
Contract for​ sale .​
Called a​ land contract 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 .​
6 .​
Builders gifting programs .​
In some parts of​ the​ country, builders fund foundations that give you a​ portion of​ the​ downpayment, so you can get into a​ home with as​ little as​ 3% downpayment from your own pocket .​
FHA and​ other lenders have so far approved of​ or​ allowed this.
7 .​
FHA mortgage loans .​
The Farm Home Administration doesn't actually loan the​ money, but guarantees your loan for​ the​ bank, so they can loan up to​ 97% of​ the​ purchase price, depending on the​ particular FHA program.
8 .​
Friend and​ family loans .​
It may not be from charity that a​ brother or​ a​ friend lends you the​ money to​ buy a​ home .​
That 7% return might look awfully good if​ their money is​ sitting in​ the​ bank at​ 2%.
9 .​
Bank no-doc loans .​
No-doc and​ low-doc loans, meaning no or​ low documentation requirements, are back, and​ you can find them through online banks .​
They are for​ those of​ you with bad credit but 20% to​ 30% to​ put down on a​ home .​
You don't even need a​ job.
10 .​
Your credit cards .​
a​ risky way, but if​ you have a​ low-interest credit card, you can use it​ to​ come up with the​ downpayment, especially if​ you can pay it​ off soon, perhaps with a​ coming tax refund .​
The banks generally won't allow this, but you can combine this with seller financing.
So are there more ways to​ approach real estate financing? You bet there are .​
These are just some ways to​ buy your own home .​
When you start investing, you can use other techniques for​ really creative real estate financing.

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