Ten Paths to Real Estate Financing

Ten Paths to Real Estate Financing

There are ten paths to real estate financing that open up your options. Many of us remember when getting a mortgage meant saving up to put down 20% on the home, and then the mortgage loan would cover the other 80%. This can still be done today, but people find that they have way more options than they had back then.
(1). The first option is a gifting program. There are places in this country where builders actually fund certain foundations that will give you a big portion of your down-payment. This allows for some lucky people to get into their home for as little as 3% down-payment. FHA is a good example of one of these funded foundations.

(2). No-doc loans are another option. These loans have either 'no' or 'low' documentation requirements. These are usually done through online banks. If you have bad credit and can put down from 20% to 30%, then you can obtain one of these even without a job.

(3). FHA loans. The FHA won't actually loan you the money, but they will guarantee it for your with the bank. This allows them to loan up to as much as 97% of the loan value depending on which FHA program you go through.

(4). VA loans are good options as well. All you need is to have a decent job, have prior service that falls within the guidelines, and a down-payment, and you can get one of these loans.

(5). Buy on Land Contract. Another term for this option is 'contract for sale'. This allows you, the buyer, to make your payments directly to the seller instead of to the bank. All your negotiations are done between you and the seller, as far as interest rate and down-payments, and the term of the loan.

(6). Seller-carried second mortgages. Sometimes a bank will let you put as little as 5% into the price of the home, but then they'll only loan you 80% of the purchase price. This is where the seller can take back a second mortgage for the difference, and you pay make the payments to the seller.

(7). State Housing Programs. Most any state has a form of house financing for low income buyers. They have many loan-guarantee programs available to assist you in you purchase.

(8). Family loans. Many shy away from making family loans. It just gets messy when family members encounter money hassles. But it's not that way with all families. And a family member who has money sitting in a bank drawing 2% interest, may like collecting 7% from you.

(9). Manufacturer loans. There are lots of manufactured home companies who are helping with financing their homes. They can offer 5% or less for a down payment on their homes.

(10). Credit Cards. This isn't for everyone, and can be risky, but your down payment can be put on a low interest credit card. This can be a good idea if you're expecting a nice tax return in the near future to pay it off with.

These ten paths to real estate financing are not the end of your options, but they give you an idea of what's available. You can do your own research and find there are many more ways of getting you the home you need.