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Real Estate Financing - Ten Ways

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                         Real Estate Financing - Ten Ways

Do you remember when real estate financing meant you saved up enough to put 20% down on
a house, and then you got a mortgage loan for the other 80%? Well, you can still do that, but
there are many more options now. Here are ten of them.

 1. Gifting programs. In some parts of the country, builders fund foundations that give you a
portion of the downpayment, so you can get into a home with as little as 3% downpayment
from your own pocket. FHA and other lenders have so far approved of or allowed this.

 2. No-doc loans. These and "low-doc" loans, meaning no or low documentation
requirements, are back, and you can find them through online banks. These are for those of
you with bad credit but 20% to 30% to put down on a home. You don't even have to have a
job.

3. FHA loans. The Farm Home Administration doesn't actually loan the money, but
guarantees your loan for the bank, so they can loan up to 97% of the purchase price,
depending on the particular FHA program.

 4. VA loans. If you have been in the armed services, have a decent job, and can save two or
three paychecks, you can probably get a home with a VA loan.

 5. Land contract. Also called "contract for sale" and other names depending on the part of
the country you are in, this just means that you make payments to the seller instead of a bank.
It's up to you and them to negotiate downpayment amount, interest rate, and the term of the
loan.

6. Seller-carried second mortgages. Some banks will allow you to have as little as 5% into a
home purchase, but will then only loan you 80%. The seller can take payments on a second
mortgage from you for the other 15%.

7. State housing programs. Almost all states have some sort of financing help in the form of
a loan-guarantee program or outright loans for low-income buyers.

8. Family loans. It may not be out of charity that a brother or a friend lends you the money to
buy a home. A 7% return might look awfully good if their money is sitting in the bank at 2%.

9. Manufacturer loans. Some manufactured-home companies are arranging financing with
5% or less down for their buyers. They must feel their money is secure, since a good modular
on a piece of property is nothing like a mobile home on a rental lot.

 10. Credit cards. This is a risky one, but if you have a low-interest credit card, you can use it
to come up with the downpayment, especially if you can pay it off soon with a coming tax
refund, for example. Banks generally won't allow this, but you can combine this with seller
financing.

Are there more ways to approach real estate financing? You bet. This was just to get you


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