Options For People Who Need To Have No-Credit Financing For A Home
Posted on: 9 December 2019
The opportunity of homeownership is often considered to be a major component of the American dream. Not only does owning your own home help create a nice nest egg for your family's future, but it can also be the starting point of building a life in the community in which you live. For people who don't have credit or who have bad credit, getting a loan can be a challenge. Thankfully, there are programs available for people who don't have a lot of credit to get into a home. There are also alternative financing opportunities. If you are ready to start a life in a place you can call your own, there are a few things you should know about the options available for you.
Subsidized Loans Are a Great Place to Start
In recent years, government-subsidized loan programs have been expanded and more opportunities have been made available. For first-time home buyers, there are several loans available for people with little or no credit and for people to have little or no down payment. USDA loans, which require no down payment, and FHA loans, which require only just over three percent down, are great options. The credit threshold for these government-backed loans is as low as the high 500s as far as your FICO score is concerned. If you have no credit, you can still apply and be approved for these loans and many of the other subsidized programs out there. Talk to a local real estate agent, mortgage company, or financial adviser on where to start regarding your specific needs.
Negotiate Owner Financing on a Home
Renters with no credit or bad credit should consider the option of owner-financed loans. There are many people who own their homes outright who are willing to finance the sale of their home. This option gives the current owner an opportunity to make money on interest. The terms of seller-financing loans can be as liberal as the owner and buyer want to make them. Interest can be negotiated, the payoff time period can be negotiated, and any concessions the owner or buyer wants to throw in can be worked out and agreed upon. Having some flexibility on the terms of the loan, including not requiring a credit check, can be beneficial for those people who can afford to buy but don't have the best credit situation at present time.
Use Assets and Income to Secure Financing
For those people who have good incomes or assets to work with, bad credit doesn't have to make it impossible to get financing. Assets, such as land, gold, stocks, and other valuables, can be used as collateral with most banks. Some banks will also loan money based on the current income of an individual, especially if the income has been steady for a long time. In order to obtain the loan you need to get into a home, you may have to speak with multiple banks, but if you have the income or assets to afford a home, you should be able to find a lender willing to take a chance on you.
Getting into a home can be more challenging if your financial record has had some negatives put on it. The same is true if you don't have much of a record. That doesn't mean there aren't several good options available to you. It may take more time and effort to find a suitable financing option, but it's worth it if you can finally buy your very own home.
For more information on no-credit financing options, contact a real estate agent or lender near you.
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