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Home Purchase Options You Might Not Know About

Home Purchase Options You Might Not Know About

When most people think of buying a home, their minds immediately go to the standard process of saving for a down payment and getting a traditional mortgage. But there are other options available that can help you reach the goal of homeownership. Some can make saving the down payment a non-issue while others help current homeowners looking to move from their current home to a new one.

So, before you begin walking the most traveled path for purchasing a home, see if these options will help you get there faster.

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Ways to Skip Saving for a Down Payment

One of the biggest hurdles between most people and homeownership is the down payment. Most conventional mortgages require borrowers to put down 20 percent of the sale price of the home. And that is no small feat.

However, certain loans require smaller down payments. For example, FHA and VA loans often have less stringent requirements, as well as USDA loans. Specialty loans on Fannie Mae and Freddie Mac foreclosures are also available without a full 20 percent down payment. The exact amount required can vary over times, so it is important to see what options are available at the precise time you are looking to buy.

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Another Option for Down Payments is Gifts. Certain family members can provide funds for use towards the down payment without some of the time-based eligibility restrictions that can affect the buyers own savings. However, only certain familial relationships qualify, and the person providing the gift must legally attest to the fact that the money is a gift and not a loan.

Those within certain income limits may qualify for down payment assistance through local government organizations. Certain states, counties, and other municipalities provide funds for down payments to individuals who meet specific criteria. Often, only those buying a primary residence can apply, and a minimum stay in the property may be required before a sale. Failing to meet the terms often means the funds must be paid back, so it is important to understand the details prior to accepting assistance.

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Bridging the Gap When Selling One Home to Buy Another

Another situation that complicates the home buying process is when the borrower is currently paying a mortgage on a primary residence they intend to sell. Trying to coordinate the timing of a sale and purchase isn’t easy, and juggling multiple mortgages only makes things more complex.

It is common for current homeowners to have their “down payment” tied up as equity in their current property. That means they have an appropriate amount of assets, but it might not be accessible as cash. Additionally, certain home loans have restrictions regarding whether they have to be associated with primary residences. Additionally, some banks may be hesitant to offer a favorable mortgage rate on the new loan if the amount remaining on the current mortgage is high.

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In some cases, the best course of action is to consider bridging loans for the house purchase. What these loans provide is a short-term financing solution to help you transition from one mortgaged property to the next.They can be used to tap your current properties equity to obtain a down payment or can pay the current mortgage off making it easier to obtain one on the new property. Then, once the current property sells, the borrower simply pays off the bridging loan and continues with their new mortgage.

Otherwise, the best alternative is often to wait until your current home sells before jumping into the market. In those cases, you may need a temporary housing solution for the interim.

The Traditional Method

While some of these alternatives can make buying a home easier, there is also nothing wrong with going the traditional route. In fact, it can be the smartest move financially in most cases. So, if you aren’t sure about any of these other methods, or don’t have access to them, go ahead and save the 20 percent first. In the end, there is no such thing as having too much savings for a down payment.

Featured photo credit: http://goodmanrealtyaz.com/ via goodmanrealtyaz.com

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Shelly Green

Entrepreneur writer and a blogger

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Last Updated on July 5, 2019

5 Reasons Why You Should Always Be Yourself

5 Reasons Why You Should Always Be Yourself

When it comes to being yourself, there can be a lot of pressure from the outside world as it tries to influence who you are. Living in a society that is constantly developing, it’s important for you to always be yourself from the inside out. When you deeply know yourself and the boundaries that you have set, you are more likely to experience a fulfilling and rewarding life. Without knowing yourself and establishing those boundaries, you can easily be pushed around and end up on a dirt path.

“Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it” – Matthew 7:13-14

You have the option of taking the path that is broad or taking the path that is narrow. You can either conform to what life wants you to be, or have the courage to remain true to yourself throughout the years. It’s definitely a challenge to have a strong sense of self when we are constantly getting distracted and being influenced by the media and society’s way of life. But if you want to reach your fullest potential in life, it all starts with being yourself.

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Why should you always be yourself?

Because you will:

  1. Live in alignment with your values and beliefs. Being yourself is all about knowing what you believe in and the values that you live by. When you are not yourself, you will take on the values and beliefs of others. This is when you start conforming to other people’s expectations and way of thinking. When you know your values and why you do what you do, you will live according to your own values and beliefs.
  2. Establish your own identity. When you are able to have a solid foundation of being you, you are establishing your own sense of identity. No matter what happens in your life, you will always know who you are. There will be times where you may feel lost or distracted, but if you have your own identity you’ll be able to get back on the right path. Without establishing your own identity, you may easily conform and lose yourself.
  3. Build courage. It takes a great amount of courage when you decide to take the path that goes against the crowd. The reason why the majority of people take the broad path is because it’s easy. It’s easy to just follow the crowd. It’s more of a challenge when you stay true to yourself and establish your own identity. This challenge of always being yourself takes courage and inner strength. No matter what comes your way, you’ll know how to handle it.
  4. Establish boundaries. When you are always yourself, you know what your limits are and the boundaries that you have set for yourself. When people cross your boundaries, you will know. But if you don’t establish boundaries, people may very well walk all over you and take advantage of you. If you are always yourself and you establish boundaries, you are more likely to be aware when people start taking advantage of you. Create and establish your boundaries.
  5. Find focus and direction. When you are always yourself, you are more likely to have focus and direction in your life. Imagine someone who is constantly conforming to other people’s expectations. Do you think this person has focus and direction? I don’t think so. When you stay true to who you are, you are more likely to know the goals you want to accomplish and how to go about accomplishing them. You are able to stay focused and know which direction to take in order for you to accomplish your goals.

No matter what you experience in life, the only person that will always remain constant is you.

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Featured photo credit: María Victoria Heredia Reyes via unsplash.com

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