Is it possible to buy a home without getting a home loan through a bank? The short answer is yes. In fact, many homebuyers are buying homes without ever stepping foot inside a bank. There are many reasons why homebuyers are considering buying a home without going through traditional financing. The biggest reason is: credit score. If your credit score is not high enough for you to be considered for traditional financing then alternative financing may be a solution for you.
Seller Financing
If you are unable to secure a loan through a bank you may want to consider seller financing. Seller financing is when the owner of a property finances the home instead of the bank. The first step in achieving this is to identify the property you are wanting to buy. A qualified real estate agent may also have a list of properties in your area that sellers are essentially willing to be the bank.
Once you identify the property you are interested in, if the seller has not initially offered seller financing then a conversation will be had on agreeable terms that both buyer and seller are satisfied with. Keep in mind that often interest rates or down payments may be steeper than if you were to go through a mortgage bank as there are some risks involved with the seller financing the property. Once terms are established and written into an agreement, then closing would take place normally. Be sure to connect with a qualified realtor to review the terms
Rent To Own
Rent to own is a great opportunity to purchase your dream home sooner rather than later. Rent to Own is when a buyer agrees to rent a home from the owner for a certain time period and becomes a tenant. Once the time period has expired the tenant than becomes the buyer and has the option to purchase. Depending on the terms a predetermined amount of the monthly rent may be applied towards the tenant purchasing the home. When the time comes, The buyer can choose to purchase by applying for a mortgage loan assuming that he/she has been working on becoming eligible for financing. The owner may also be willing to be the “bank” and allow the buyer to finance directly through them.
Real Estate IS Flexible
Many buyers have this idea that real estate is rigid and that there is only one way to become a homeowner. This is an absolute myth! When it comes to real estate we can be creative in helping a buyer find the perfect home for them. It starts with understanding your goals. Once we understand, we can then provide options on what best helps you to achieve those goals. With options, there is power in choice. Real estate is not a one-size-fits-all! Many future homebuyers just need a plan to help guide them to the next step in their homebuying journey.
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