Information on buying a home without bank financing

[Michael Lightwood]

I am ondering how a person can purchase a home without back financing. Is this possible and if so how? 

[Nick C.]

Cash, Hard Money Loan, private money. 

[Erik Estrada]

Quote from @Michael Lightwood:

I am ondering how a person can purchase a home without back financing. Is this possible and if so how? 

 Is this purchase for your primary residence? 

[Michael Lightwood]

Quote from @Erik Estrada:

Quote from @Michael Lightwood:

I am ondering how a person can purchase a home without back financing. Is this possible and if so how? 

 Is this purchase for your primary residence? 

 Yes actually it will be. 

[Robert Medina]

search for homes that accept owner financing 

[Trevor Alexander]

What's the particular issue you don't want/cant have bank financing?

Your other options will be seller financing or private loan.

[Jeff Copeland]

Seller Financing: https://www.biggerpockets.com/...

[Tom S.]

@Michael Lightwood  As others mentioned, for the purchase of your primary residence, seller financing or a private loan from friends/family would probably be your best bet.  The main issue there is it's usually shorter term, 5-7 years being pretty common.  Most people will not or cannot wait 30 years to get their money back.

So if possible, conventional bank financing is sill the least expensive way to go.

Good luck!

[Michael Lightwood]

Quote from @Trevor Alexander:

What's the particular issue you don't want/cant have bank financing?

Your other options will be seller financing or private loan.

 I'll message you.

[Wale Lawal]

@Michael Lightwood

Would you like to become a homeowner? Purchasing a home is a big decision and a considerable financial commitment, and for first-time buyers it can be tricky to qualify for a mortgage from a traditional lender if you haven’t saved enough for a down payment, or if your credit score is too low.

First-time home buyer programs are offered by both the government and some banks, but they still have criteria such as credit requirements and income limits. Fortunately, you have other options.

If you don’t qualify for mortgage financing or are simply curious about your options, here are four alternate routes to becoming a homeowner without a traditional mortgage.

1. Rent to Own
Renting to own can be a good alternative if you’re unable to save for a down payment or don’t qualify for mortgage financing due to a low credit score. In a slow market, a rent-to-own property may sell easier, while offering an owner the benefits of having a rental property, such as additional income and tax deductions.

2. Get Owner Financing
Occasionally, the owner may be willing to sell to you directly. This means they will finance your purchase, and you make monthly mortgage payments to the seller, rather than a bank.

Any real estate transactions should be documented in writing, so the seller and buyer should create a Real Estate Purchase Agreement to facilitate the sale and outline the payment details. In many cases, the seller will wait to transfer the property title until you have made your final payment, at which point they can use a Warranty Deed to transfer legal ownership.

3. Get a Private Loan
If your credit score is too low to qualify for a traditional mortgage, you may have better luck with an investment lender or a peer-to-peer lender. While private lenders are less risk averse than banks, keep in mind they will likely charge you a higher interest rate (12-20%) to account for the higher risk of lending to you.

A more attractive option, if possible, is to borrow money from a family member or friend. It can be awkward to ask a loved one for such a large sum, but private home loans can be beneficial to both of you. While you will likely be able to negotiate more flexible payment terms and a lower interest rate with a family member than with a bank, your family member could potentially earn more interest off your loan than with other types of investments.

4. Pay Cash
The last option is the simplest: pay for your home in cash. Making a cash purchase can save you money in the long run, particularly on closing costs and interest payments on your loan. Even better, you can enjoy being debt free and unburdened by monthly mortgage payments.

A cash purchase also has advantages for the seller, particularly if there is a bidding war and they want to make a quick sale. A cash offer also means they don’t need to worry about the buyer backing out of the sale because they are denied financing.

All the best!