Buying a house is on top of everyone’s priority. Nothing beats the feeling of owning your own house and lot. Knowing that you own a property means that you made it and that you are now closer to your dreams. But financing a house is very crucial. There are so many ways in which you can finance your house. Below are some examples every future home owner should be aware of when buying their first house.
Rent to own
Rent to own is very accessible nowadays since there are tons of developers who offer this type of payment scheme. It makes sense because you can already live in the house while financing for the property. A rent-to-own deal allows you to live in the house as a tenant but with the option to buy. A typical rent-to-own deal has you renting the house for one to three years while you’re working on improving your credit score and saving for a down payment. After that set period is up, you can buy the house. It’s very convenient and perfect for those who are just starting out.
Bank loan is a classic way of paying for your home. But there are tons of things to remember when you finance using bank loans. First is to get a good credit score. A score of 700 to 720 will get you a good deal, and 750 and above will garner the best rates on the market. Second is choosing the type of mortgage that you will need. Understanding your home financing options is the first step to making a smart choice. So before we go any further, we need to talk about the different kinds of mortgage loans that are available to you. These days, most home loans fall into one of two categories. They are either fixed- or adjustable-rate mortgages. The primary difference between them has to do with the interest rate, and how it behaves over time. Do your research to see which option is best for you.
But the disadvantage of a bank loan is that it takes time to get one. And also there are tons of requirements to fulfill which can be very terrifying and stressful to any first time home owner. If you have no time and you think you only have a minimum requirement I your hand, then this option is definitely not for you.
If you have a friend or family member who’s in a position to lend you the money to buy a home, this might be a good option for you. Called a private mortgage, this type of loan works the same way as a loan from a bank or credit union would. You sign a contract that spells out the terms of the loan, such as the payment schedule and the interest rate. If you default on the loan, your friend or family member can, at that time, call in the loan. In that case, you’d need to get financing from a bank or credit union to pay off your private lender.
Fortunately, there are tons of cash loans available in the market nowadays. Cash loan is the fastest way to get you the money that you need to finance your dream home. It only has a few requirements and not strict with qualifications unlike banks. You can also get the money in just a few days. This way, you can already star planning on which property you should buy right away without any stress included in the long process.