Here Are Your Options for Buying a Property

| June 17, 2015 | 0 Comments

If you’re thinking about buying a property, you’re taking a big step into the future. You need to think about the different options available to you when it comes to buying a home. Here are some of the most familiar and attractive possibilities.

Mortgage

The traditional form of buying a home is to take out a mortgage. Your mortgage rate will be based on several factors including your income and credit history. Hopefully, you’ll get the best rate possible, but it doesn’t always work out that way. When you apply for a mortgage, you’re going to need to have some money saved already. The way it works is that you’re going to have to stump up for a percentage of the mortgage amount (typically 10-20%) as a down payment. Bear in mind you’re going to need to make mortgage repayments each month. So you have to make sure you can afford it.

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Auction

A more unusual method of buying a property these days is to buy one through an auction process. This is an approach that has increased in popularity over the past half a decade. Essentially it allows you the opportunity to buy properties for a reduced rate. Again, you need to be sensible if you’re bidding on properties. You’ve got to be able to afford to pay for any auction you might win!

Save Up

One of the least common ways to pay for a property is to save up and buy it outright. This is not very common because it involves spending a lot of money up front. Often people can’t afford to make significant payments like this. It requires a lot of time, effort and discipline. However, it’s an excellent way of being able to get hold of a property and stay debt free. This would be a fantastic option if you can take the time to save.

Home Loan

As an alternative to a traditional mortgage, you might wish to consider a home loan. There are subtle but significant differences when it comes to these. For instance, you might want to consider getting a USDA home loan. There will be certain differences and requirements vs getting a mortgage. A USDA loan doesn’t require a down payment like a traditional mortgage does, and the rates offered tend to be better. Don’t forget, there are certain USDA loan requirements that you must meet before you’re eligible. There will be things like income restrictions and other important considerations.

Part Buy – Part Rent

There are other options available to you as well, one of the most common being leasing. This is also known as part buy – part rent. It’s the concept of leasing the property for a certain period, after which you’ll be able to buy it. This is a common and popular choice among first-time buyers. The reason for this is because it’s a more cost-effective way of affording a place. If you’re looking to get on the property ladder, this is going to be the best option for you.

The good news is that nowadays there are so many options open to you if you want to buy a property. A decade or so earlier your choices would have been much more limited. The good thing about having lots of choices is it makes the process of buying a property accessible to more people.

 

Category: Home Loan

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