Alongside patiently looking through listings and going to showings to find the right property for you, securing financing to purchase that property is another one of the major hurdles you’ll encounter as a prospective homebuyer. To aid you in expanding your possible financing avenues, let’s see what Rome homeowners need to know about creative financing options.
Loan Programs
Outside of simply creative ways to finance, let us remember that we live in the state of New York. We have an abundance of state, and even federal, grant-type programs that home buyers may be able to take advantage of.
These programs were created to fill specific roles and meet the needs of the average hopeful buyer. Not only can they be of great help to qualifying buyers but they are also often overlooked despite the great assistance they provide.
There are three big federal loan programs intended for specific purposes: FHA, USDA, and VA loans. Each of these loan types come with their own set of requirements and stipulations, so it’s a good idea to thoroughly investigate each of them before assuming you’ll be accepted into a given program and base your number crunching off of that.
These loans provide a grab bag of benefits, such as reduced or no down payment, lowered interest rates, and the elimination of Private Mortgage Insurance.
FHA loans target first-time homebuyers to ease their entrance into the real estate market, USDA loans are made to encourage development in rural communities, and VA loans offer outstanding loan benefits to qualifying military veterans and active servicepersons. You can contact your county’s Federal Housing Administration office or visit their website to inquire about the qualifications for these programs and be pointed in the right direction regarding any further steps in the application process.
Seller Financing
Branching out toward the more creative financing options, there is always the potential for a seller to consider financing you to purchase their home.
From the buyer’s perspective, this operates similar to your regular home loan, but the finances are given to you by the property’s seller. This obviously involves a lot of trust on the part of the seller, and we would recommend bringing in an attorney experienced in real estate law.
An attorney should be seen as a necessity here to draw up a binding contract that affords legal protections for both the buyer and seller. This then allows the buyer and seller to negotiate the terms of the contract and come to an amicable agreement moving forward.
Seek Out Investors
Some of my favorite type of money is Other People’s Money. Believe it or not, there are more people in your life than you know that invest their money. Some invest in stocks, others in real estate. If you have the ability to borrow someones money, use it however it suits you best, and then provide the investor a return on their investment, why wouldn’t you? You could also use a crowd-funding strategy to purchase, and pay returns with gained equity in a deal.
It must be noted that depending on crowdfunding for home loan financing is a very long shot, so utilizing the crowdfunding gains as a supplement to other financing methods should be seen as a best-case scenario. You’ll also want to ensure that you are following any terms laid out by the crowdfunding site to avoid any nasty legal entanglements.
Looking to acquire a personal loan through a private investor is another idea. This would be like the previous idea of seller financing, except the individual or individuals giving you the personal loan are not owners of nor selling you the property.
Rent to Own
A final one of our creative financing options as a way to finance your home purchase is a rent-to-own agreement with the seller. This would turn your home into a temporary rental property with the seller acting as your landlord.
Just like our preceding ideas, securing the agreement in a legally binding contract is the best way of working out the details and keeping everything above board. In a rent-to-own situation, you’ll be making regular payments to the seller with either the end goal being that you pay off the loan within the specified period of time or intend to purchase the home for a specified amount after a certain period of time.
Guidance Through Creative Financing Options in Rome
If you’re looking for help finding creative financing options to buy a home in Rome, contact us today at (315) 351-2765!