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Trouble Buying a House? Explore These Nontraditional Home Options – GOBankingRates

svetikd / Getty Images


svetikd / Getty Images

Purchasing a home in the usual way — which often requires very good credit, coming up with as much as 20% down, and is often out of reach for individuals on one income — can be a barrier to home ownership for many. In this current housing market, which has remained remarkably bustling even through the pandemic, many people who wish to buy homes might find themselves discouraged.

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However, there are some alternative paths to home ownership that might just make it possible. Let’s review them.

Owner Financing

Owner financing is one of the most frequently available alternative paths to home ownership, said Dennis Shirshikov, a strategist at real estate investment company

“With owner financing the owner of the home acts as the lender for the property. The buyer pays the owner a down payment and makes monthly payments to the owner just like they would on a mortgage.”

In this situation, owners have the flexibility of accepting smaller down payments and making other concessions to sell their homes. The terms are often standardized and the interest rates are slightly higher than conventional financing.

“Owner financing is a path to home ownership for anyone that lacks the money to make a full down payment on a property with conventional financing.”

Owner financing is also a path to home ownership for homes that do not pass the inspection criteria for banks to lend on.

Become a Live-in Landlord

One great unconventional path to home ownership is becoming a live-in landlord, said Bill Samuel, a residential real estate developer and real estate broker with Blue Ladder Development.

“Buy a small multi-family building with existing tenants in place and live in one of the vacant units. If you purchase a small multifamily property — four units or less — then you’ll be able to take advantage of the more favorable residential financing terms and you’ll benefit from an accelerated depreciation schedule,” he said.

He does warn that you need to do good due diligence on the tenants before taking this step, including a solid credit history and background check. Also make sure there are no other leases in effect or anything else that might prevent the sale from going through or bind you to a contract in a way you didn’t sign up for.

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Rent To Own

An easy alternative to home ownership is a rent-to-own deal, said Ryan Cassidy, a real …….


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