John Samuels asked:




These days obtaining a home mortgage loan can be a very taxing and stressful affair as it is not so easy to obtain a loan anymore. Unfortunately too many people are approved for mortgage loans but they are not financially qualified to repay the debt. This in turn results in massive amounts of foreclosures which just sit abandoned all across the country.

Today borrowers who seek a home loan through traditional lenders have to have nearly perfect credit clubbed with a strong history of paying the debts on time as well as a solid work history also. However since it can be frustrating for those with less perfect credit there are various other alternatives and options to explore while buying a home.

One common practice is known as seller carry back financing. This financing technique helps sellers carry all or a portion of the sale price. Buyers enter into a contract with the seller which typically lasts for two to five years. This allows the buyer time to clear up negative credit or even to establish a credit history. The advantage is that at the end of the contract the borrower can apply for a convectional home mortgage loan. Another consideration is to enter into a rent-to-own agreement. This agreement allows the buyers to reside in the home as rental property and at the end of the rental period a portion of the rent is contributed towards the purchase price. Rent-to-own contracts generally last for two to three years and this also helps the borrower to establish a solid payment history. Buyers who engage in both carry back mortgages plus rent-to-own agreements should consult with a real estate attorney before signing. In case of a default the contract gas to include legalese to cover both the parties. Monthly payments also need to be made by cheques which can be verified easily if any questions arise.

Home Mortgage Loans can be easily obtained through private lenders. A number of real estate investors and investment groups offer hard money loans to borrowers not qualified for traditional lending. Its however vital to bear in mind that home mortgages aren’t cheap. The interest rate also normally falls to about 15-20 %. Additionally most real estate investors generally require a 30-50 % down payment as well. Private lender mortgage loans don’t intend to last more than 2 to 3 years and this allows the borrowers to improve credit and refinance into a convectional loan. The Federal Housing Administration ( FHA) offers loans to the borrowers who are unable to meet convectional home mortgage loan criteria. However in order to secure FHA loans the borrower must provide proof of income, source of down payment and must be able to prove that the real estate property is property valued. FHA Lending limits vary by the state and the borrowers must work with a FHA approved mortgage broker.

It is necessary to do proper research and speak to an expert about the carry back mortgage and the rent-to-own agreements to analyze which home loan mortgage suits your needs and your requirements best.

Shirley