There is no truer version of living the American Dream than owning your own home. Considered a major milestone in an adult’s life, becoming a homeowner is real right-of-passage.
But the reality is that it’s not always as easy as being granted a home loan and receiving the keys a few days later.
There are a number of factors which deter many Americans from being homeowners in their lifetime. Just some of these include lack of funds and below-par credit scores.
But this doesn’t have to be your reality. Uncover the easiest way to buy a house in this blog…
The Easiest Way to Buy a House
It’s no secret that the home loan process can be stressful and expensive.
In the U.S. there are a number of options for potential home buyers, including loans, grants, incentives, and retirement accounts. Here are 5 ways to buy a house and make it your home…
1. The VA Home Loan
If you’re a U.S. veteran, the Veterans Administration (VA) makes it possible to own a home within the United States.
However, the VA does not issue home loans. Instead, it oversees granting authority to banks, mortgage lenders, and credit unions to offer VA mortgages to U.S. veterans.
The VA is not as strict on credit guidelines but requires veterans to meet a specific set of qualifications. Most loans are equal to 100% of the home’s appraised value.
2. The USDA Mortgage
Yes, the United States Department of Agriculture offers funding to new homeowners, including a 100% loan on a home’s appraised value. Alternatively, you can receive a 100% loan on the selling price of the home, whichever is lower.
How is this possible? The USDA stipulates that the potential home must be within a zone that is considered rural within the United States.
3. The Federal Housing Authority Mortgage
For a number of years now the Federal Housing Authority (FHA) has made it possible for Americans to own homes with little to no money.
However, the FHA works in a similar manner to the VA. It does not issue loans, but grants permission to lenders to provide mortgages according to certain criteria.
Generally, the FHA has a relatively lenient credit standard and also allows home sellers to pay closing costs on the home. Much like VA and USDA loans.
You are required to pay 3.5% of the purchase price of the home as a down payment. However, this money does need to come directly from you. This amount can be paid by relatives, a grant or borrower program.
4. The 5% Down Payment Mortgage
For many years banks have required new homeowners to cough up a 20% down payment of the home’s asking price. Today, this has changed drastically to just 5% of the home’s value.
However, strict criteria must be met by homeowners before qualifying for a 5% down payment mortgage. This includes a very good credit score of no less than 700 and a very strong employment track record.
5. Retirement Annuity Funding
Most U.S. businesses offer their employees a 401-K or similar retirement annuity program. This is where an employee pays a percentage of their salary towards retirement and then a percentage of the funds is matched by the company.
Over time this amount adds up to a decent-sized nest egg. In some instances, employers allow employees to draw from this fund as a down payment on a home.
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Learn the ins and outs of the easiest way to buy a house, managing your finances, how to save, and more with Engineer Your Finances.
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