Keller Williams Realty,Brevard

Alternatives to Traditional Home Loans

by Maria "Action" Jackson 06/23/2019

The decision to buy a house is probably the best decision you would ever make. Deciding is the easy part; coming up with the capital to finance the dream is the hard part. Getting a home of your own has its perks, but it can be a daunting process to acquire.

Usually, prospective homeowners seek mortgage loans when they need to get a house they can afford. The traditional mortgage has its terms and conditions for granting out loans. You must satisfy the terms and conditions before such loans become available. 

So, what happens if you do not qualify for a mortgage payment? Does this mean your ‘American Dream’ of owning a home would not see the light of day? There are other channels prospective homeowners can seek loans from aside the traditional mortgage. They include:

Lease-to-own

Lease-to-own is an agreement between the seller and the buyer. The seller rents the house to the buyer temporarily if the buyer can come up with enough money as a down payment. The rent installment paid, out of which a certain amount goes into an escrow account as money to use in securing the home. The contract is usually between a year after which the buyer pays for the balance of the property or packs out and leave. 

Borrow from Your Retirement Account

Borrowing from your retirement account is like borrowing from yourself, but this should only be short term. You will pay a penalty fee of 10% if you are not up to the age of 60 years for taking out money from your retirement account - and you would pay taxes on the amount borrowed. If you lose your job during the process, you must pay back the money borrowed within 60 days. 

Borrow from Your Insurance Policy

What’s the harm in borrowing from your insurance policy especially if your insurance policy allows you to take a loan against your principal? You don’t have to return the money, but you would get less than the amount you or your heir were supposed to get paid when the policy matures. You can apply for the loan through your insurer directly and bear in mind that the rates vary. 

Save Enough for A Down Payment

This method seems like the most convenient, but it requires you to exercise patience. Most lenders now do not need 20% as a down payment anymore but if you can’t come up with enough money as a down payment–save enough until you qualify for a traditional mortgage.

Get A Co-Signer

Getting a friend or a relative to co-sign with you is a great way to increase your chances of qualifying and to secure a loan, especially when they have a higher credit score than you.

Buying a home requires rigorous planning, and it is capital intensive. Weigh all your options before finally deciding. 

About the Author
Author

Maria "Action" Jackson

Maria Jackson grew up in Germany, but the first time she saw Cocoa Beach’s surf and sand, she knew she was home. That date was December 24, 1983, and although she goes back to Germany to visit often, she has never regretted her decision to stay here permanently.

Maria worked in several fields over the next few years, but they all had some link to the real estate industry.  She finally realized that was the career she was looking for and in 2004 she obtained her real estate license.  In 2019 she joined Keller Williams (KW). “I’m pretty tech savvy,” she says, “and I liked that the KW app is so up to date with the latest in marketing tools and internet sales.  I love using Social Media including Facebook, Twitter and the DSRE app.  I believe it’s important to utilize every tool at my disposal to market my customer’s listings.” Maria recently closed on a $860,000 home and credits the marketing tools to her success.

She wakes up each morning excited about what the day will bring. “Every day is a new day, a new client, a new listing.  I love the variety of learning something new every day. I’m a really good communicator and even better at being able to see the whole picture, even when my client doesn’t. Sometimes clients think they want one thing but I can point something out to them and they will do a complete reversal. It’s my job to point out all the details that sometimes they don’t see.”

Maria, who is fluent in English and German, has worked extensively with local and international investors. Although she lives in the charming Canaveral Groves community, she manages listings and transactions throughout all of Brevard County.

Maria and her husband have three grown daughters and two grandsons. They love family get-togethers and spend as much time on the water as possible. Maria devotes her volunteer time at a local elementary school and has helped host fundraising benefits for local residents in need.

Maria’s feelings haven’t changed since that first day she set eyes on the beach; she continues her love affair with Cocoa Beach and the surrounding area and knows that she made the right decision in calling this new place home all those years ago.