The real estate market is much more volatile now than it was fifty years ago and buying a home now is much more difficult than it was in the past. The primary reason behind this is the price of real estate, which has gone up drastically over the years. Today, homeowners are coming up with more and more creative solutions to fund the purchase of property, and today we’ll be taking a look at what solution suits you best.

A Conventional Mortgage

This type of financing is actually the most common way of acquiring any real estate. For most people, it’s unrealistic to expect that they could save up and buy property without a loan.

Choosing a conventional is the most common type of real estate loan.

Moreover, a conventional mortgage can be difficult to qualify for. These mortgages provide the buyer with a fixed rate. However, to actually qualify for the mortgage, a buyer needs to place a larger down payment, they need to have a high credit score and a lower DTI (debt-to-income) ratio.

Most buyers, unfortunately, can’t qualify for these mortgages, but if you can, know that they’re usually cheaper than federal government loans. Another piece of good news is that mortgages have reached a record low in 2021 – a direct consequence of the global pandemic.

Federal Government Loans

These loans, officially titled “The Federal Government Administration Loans”, are usually much easier to qualify for. They require a lower credit rating and a lower down payment. The down payments can sometimes be as low as 3.5 percent of the entire property’s value!

Unlike the conventional mortgage, though, you have to pay an insurance premium that’s here to basically cover the mortgage lender. The conventional mortgage only requires you to do this in a few cases.

A Reverse Mortgage

This option is only viable for homeowners that are 62 years of age or older. You can qualify for this mortgage much more easily than you would qualify for a conventional mortgage, as it requires a lower down payment and a lower credit rating.

There are many different reverse-mortgage pros and cons, but the most important thing that makes this a great option is the fact that you’re freed from paying monthly payments to the lender. Instead, the owner gets the loan in the amount of the value of their home. That loan is only due once the borrower dies, sells their home or moves away.

This would be a great way to fund your second vacation home.

Finding an Investor

Having an investor lend you money for a home can be a great way to finance a property if you’re handy! Basically, this works by the investor financing the home you’ll live in with an agreed-upon time you’ll be moving out.

During your stay at the home, you have to fix the property up (once again, agreed upon terms) by the deadline, after which you’ll give the keys to the investor. If you’re ready to take on this sort of project, you can get a house for free (more or less), but you’ll have to move out after a while!

Some investors would even let you take a part of the proceeds once they sell the place!

A Rent-to-Own

Most homeowners see this as a last resort option, but it might be just the right thing for you if you’re having trouble finding the funds to buy a home. A rent-to-own agreement allows you to live on the premises as a tenant as you save enough money and improve your credit score enough to actually buy the property.

The time it’ll take you to buy the property is agreed upon before you sign the contract. Some owners will help you speed up the process by including a part of the home’s price in the monthly rent!

This can be a great, albeit a slow option. But it can turn on your head abruptly if you’re not actually able to buy the home at the end of your contract, as the money you paid usually won’t be returned to you.

Online Funding

Crowdfunding campaigns have become very popular in the past decade, and it’s lately become a move some homeowners make when they’re trying to save up for their first home.

Basically, if you have a story to tell, people might be willing to donate money to help you fund your property. However, this method isn’t something you should count on, as you would need massive numbers of people donating money in order to make enough to actually make a purchase.