5 Methods Of Financing Recommended By New House Builders
If you have ever purchased a house before, you will know that the prospect of trying to secure financing can be quite a daunting one. There are a number of loan options available to you. Trying to determine which of these options is right for you and your current circumstances, however, can be a task all of its own, which is why we have compiled this list of 5 common methods as recommended by new house builders.
Traditional mortgage through a bank or credit union
Visit a number of banks and credit unions in your area to enquire about their home loan options. Once you find one that you are happy with – look for low interest rates and no fees for early payments – you can apply for the loan and cross your fingers that it will be approved. Just keep in mind that without a decent deposit or a credit history, you may struggle to find someone who says yes.
Borrowing from family
Whilst this is a very informal way of securing financing for your brand new house, it is an option that more and more people are turning to. They may ask family members for assistance in putting together a deposit or they may seek help in purchasing the entire property, from the land to the construction. If you do decide to pursue this option, you must make sure that everything is in writing to avoid problems later on.
Mortgages through new house builders
In much the same way that car dealerships are affiliated with a lending institution, it is likely that you will be able to find a builder with the same sort of affiliation. Many people find this option the easiest, as they can simply deal with the same person for the entire process; they also find it easier to actually have their application accepted. Your builder will also help you to work within your budget.
Rent to own
If you don’t have much money set aside for a deposit and you aren’t too keen on signing up for a mortgage at the moment, you might be able to negotiate with the seller for a ‘rent to own’ plan. This means that, for the first few years, you will live in the home as if you are renting it. At the end of this period, if you choose to buy, the money you have paid will go towards the deposit.
Mortgages with tenants in common
This is one of those more unconventional options that actually sees more than one person or family seizing ownership of the house. They will achieve this by pooling their resources to come up with a much larger deposit and to improve their chances of having an application approved by the bank. If a disagreement were to arise, however, you are likely to see all sorts of problems with this option.
If you are interested in having a house built for your family, you may have been wondering about your financing options and how you can go about applying for them. The list that we have compiled covers 5 of the most common options that new house builders have dealt with over the years. It is important to discuss all your options with the people involved before coming to a final decision, as this will ensure that you make the right choice.