Who does not want to have their own place, their own home? Who wouldn’t like to raise their children and spend their old age in the very same house with the memories? Owning a house and building a home, is the dream of every man. However, not every man’s dream is fulfilled. Especially, since the global economic recession, people are finding difficulty in maintaining their lifestyle standard let alone raising it. Many people cannot even imagine of buying a home at this time. However, it is not completely absurd for people to own homes now, with the help of these two widely opted ways of real estate financing.
Government Loan
This is one of the most common ways for real estate financing. People mostly go for the Federal Housing Administration loan. However, one has to understand here that this is basically not a loan. You may say it is kind of an assurance that the government gives you based on whether mortgage lenders think you are trustworthy, and that you will pay them back. There are many benefits of this type of loan. Like, for instance, people who opt for this loan have to pay a down payment that can be as low as 3% or none at all! Also, you do not have to adhere to any strict criteria with sparkling credit history. The criteria for this loan is quite flexible and you will just have to present recent utility bills, that’s it!
However, people often delay their installments and repayment in such loans, and this should not be the case!
Bank Loan
A Bank loan is the second most opted way for real estate financing. Unlike the government loan, the bank loan is based on strict rules and regulations. There is a certain criterion for the applicants of the bank loan to be eligible for the loan. You should have a credit score that may be like that of a Good Samaritan. If there are any red flags in your credit report, the bank may increase the interest rate on your loan or may even drop your application. After the recession, getting a bank loan has gone from difficult to impossible for many people. The process has lengthened and gotten more difficult.
Government Loan
This is one of the most common ways for real estate financing. People mostly go for the Federal Housing Administration loan. However, one has to understand here that this is basically not a loan. You may say it is kind of an assurance that the government gives you based on whether mortgage lenders think you are trustworthy, and that you will pay them back. There are many benefits of this type of loan. Like, for instance, people who opt for this loan have to pay a down payment that can be as low as 3% or none at all! Also, you do not have to adhere to any strict criteria with sparkling credit history. The criteria for this loan is quite flexible and you will just have to present recent utility bills, that’s it!
However, people often delay their installments and repayment in such loans, and this should not be the case!
Bank Loan
A Bank loan is the second most opted way for real estate financing. Unlike the government loan, the bank loan is based on strict rules and regulations. There is a certain criterion for the applicants of the bank loan to be eligible for the loan. You should have a credit score that may be like that of a Good Samaritan. If there are any red flags in your credit report, the bank may increase the interest rate on your loan or may even drop your application. After the recession, getting a bank loan has gone from difficult to impossible for many people. The process has lengthened and gotten more difficult.
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