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If you wish to buy a home but don’t have the credit and cannot afford the down payment, then owner financing is the solution your looking for. Seller financing (rent to own) is a process by which the seller offers to hold the note for you. No banks or credit are needed for this type of home purchasing. In this article on your options will be explained.

Should you go for owner financing?
How Does Owner Financing work
How to Buy a Home with bad credit

Why use other financing options?

There are various home financing options available in the market but owner financing/rent to own may be your preferable choice if you are in any of the situations given below:

* You do not qualify for traditional loans:

You may have poor credit due to late payments, collections or even a past bankruptcy. And, this may prevent you from qualifying at some of the best rates available. This is when you may opt for seller financing wherein the seller may ask for your credit report although the eligibility criteria are flexible and negotiable.

And if you are self-employed and cannot prove your income or else if you have taken up a new job and do not comply with the strict lending rules, then purchase through installments may be the right option for you.

* You cannot afford to pay closing costs:

You may not have enough funds to pay the closing costs on a mortgage or you may like to avoid paying tons of bank fees. This is where owner finance can save you thousands of dollars in loan costs.

* You need to get into the home fast:

You may wish to avoid the lengthy loan process and close on the home within a few days. This can be done through seller financing. Imagine by this time next week you could own a home!

To find out more information about Owner Financed Homes in Austin please visit us.

What is the use of getting only 80% of your financing needs? The best way to maximize a loan is to get 100% financing.

Understanding 100% Financing

A zero down payment on a mortgage constitutes the popular 100% financing. Borrowers who have a hard time putting up a down payment for a mortgage find this finance scheme convenient to finance the purchase of a home because they can finance enough to qualify for tax deductions. The financing format can be applied for the first mortgage and the combined first and second mortgage; borrowing has never been this appealing for borrowers who are short on cash.

In exchange for this treat, lenders require that the property must be occupied by the owner who must have a passable credit rating. Interest rates are higher but this is a minimal concern for low income borrowers who want to purchase a home but are deterred by the huge amount needed for a down payment. As mortgages go, the 100% financing will follow the variable rate or the fixed rate depending on your preference.

You can take out two loans for an 80%-20% mortgage so you can put up the 20% down payment required by the mortgage company. Doing so eliminates the mandatory mortgage insurance that goes with a mortgage, which adds up to the overall cost of the property.

More Advantages of Zero Down Payment Financing

If you have been trying to save for a down-payment for a house and there’s a house you want to buy at the moment, your savings may not be enough for the required deposit of 20% of the entire selling price. The house might go to somebody else and you don’t want that.

The 100% financing saves the day by providing you two separate loans and there is no more need to dip into your savings to come up with the deposit. You can use your savings for other urgent payments such as credit card debts.

If you already have a house or partly own one, you can cash on the equity of the property – the full amount equivalent or thereabouts to the investments you have plunked into your home. This gives you extra for your credit card loans because your home equity has become a huge line for credit.

Get the Best Deal

There are several lenders out there – private owned and government owned. Whatever your option you still have observe the proper way to choose your lender. The financing is not one year loan it is a long-term loan. If you have to pay the loan for 20 years you have all the reasons to be picky when selecting a lender for 100% financing.

The best deal for 100% financing provides you with the lowest competitive interest rate, a clear grounding on the mortgage policies, and transparency of fees and other information that can impact on your mortgage. Instead of jumping at the first offer, check out other lenders who can give you a realistic plan according to your budget. When it comes to mortgages, it’s how much you can afford to pay, not how much you want to borrow.