Buying a home can be an exciting and challenging feat. If you don’t have the ability to pay for it upfront, you may have to think outside the box (and outside your pocket) to be able to make the purchase.
Most people prefer taking the common routine in home financing, which is to get a conventional loan.
Conventional loans aren’t easy to qualify for. However, they are bound by guidelines which many of us find easier to understand. The rules and regulations that govern this kind of financing are direct and consistent, thus determining who qualifies and who doesn’t is easy.
While conventional loans have more rigid eligibility requirements, they are regarded as the safest kind of mortgage financing. This is because there is a standard process for determining the borrower’s ability to repay. This is established by reviewing and verifying a standard list of documents.
However, there are certain cases when individuals who want to purchase a property have the ability to repay a loan but just simply don’t all the needed papers for verification. They may end up declined of their mortgage application.
In these cases, a conventional loan may not be applicable. However, this shouldn’t be the final nail in the coffin. There are other “not so common” ways to finance a home purchase.
Find a property co-owner
Speaking of unconventional, this one is just that. It uncommon for two people to share a property unless you’re married. However, this kind of strategy can work.
With a co-owner, you can purchase a house sharing ownership over the said property. you both will have to come up with a contract agreement on the usage of the house.
For instance, you can agree to let the co-owner occupy the house for two to three months on a year. During this time you can take an out of town vacation. Your and your co-owner’s length fo stay may depend on home much money each of you has invested in the property.
Sacrificing One Income
This is applicable mainly to people who are living together. This technique may take you a few more years, but it saves you from having to deal with a mortgage.
If you and your partner have both working and have decent earning, you can live off on one income. So if your combined earnings total $90,000 a year, you can save half of this for a home. Having an annual savings of $45,000 will total to $225,000 in five years. By then you can purchase a house in cash.
A huge budget cut can be hard to do, but such sacrifices will pay off in time. For the meantime, try your best to live a simpler life. You both must live a lifestyle that requires only $45,000 a year.
Family, Friends, Foundations
If your trouble is about the down payment, this can be the solution to that. A friend and a family member may have willing to pitch in your homeownership plans. There are also foundations who give out cash grants to cover homeownership costs.
Maybe you have a generous aunt or a really wealthy best friend. And maybe they want to help you with the down payment and closing costs. Some home loans will allow the use of down payment gifts. The buyer only has to prove that the money was indeed given. The giver will also have to show documents to support that the money was theirs to give.
When you want to take homeownership seriously, you must not take no for an answer. You must always find other possible ways to make your dreams come true. So long as it’s legal and you know you can handle the payments well, there’s no harm in trying.