While the American Dream of homeownership isn’t always a possibility, there are plenty of opportunities available for a wide range of people to make it a reality. The following are just some of the acceptable and widely-used methods of purchasing a home.
Buy With Cash
This is typically not feasible for most people, but a fantastic way to purchase a home is to use cash. The world of cash buyers real estate can be difficult to enter, but it can’t be beaten when it comes to the return on investment. Instead of accruing interest and eventually paying more for your home than you hoped, buying a home with cash means you pay exactly what you agreed upon at closing. As soon as your property value increases, you can sell it and make a straight profit. The downside of this option is that you will need to be prepared to have that large sum of money taken out of your bank account immediately; but if you can afford it, this is a great opportunity.
Federal Housing Administration Loan
Securing a Federal Housing Administration (FHA) loan is one of the most common methods of making homeownership accessible. This governmental loan requires a smaller down payment than others and is geared toward people in a lower income bracket. While this refinance home loan makes it easier for most people to purchase a home, in the long run, it requires a larger payment.
Conventional Mortgage Loan
A conventional mortgage loan is typically a private loan that requires a higher credit score and down payment than an FHA loan. If you are able to afford a 20% down payment on your home, you can skip having to pay the private mortgage insurance which will help your total cost go down. This is a great goal!
If you cannot purchase a home with cash, then you can look into different types of mortgage loans, including an FHA or conventional mortgage loan.