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west central tribune, willmar, Minn. | Wednesday, June 15, 2022
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WEST CENTRAL LIVING
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There are plenty of real estate financing options ments and lower credit scores ► Conventional lending: ConvenMetro Creative Connection than many conventional loans. tional lending refers to when The decision to buy a home is sigFHA loans also require morta bank or another financial nificant. Real estate is the biggest gage insurance up front, plus institution loans a home buyer investment the average person will annually for 11 years or the life money to buy a home. This is make in his or her lifetime, which of the loan depending on the one of the most common ways underscores just how significant length of the loan. to fund a home purchase. Perthe home buying decision can be. sonal credit score as well as ► HELOC: A Home Equity Line The real estate experts at Zillow of Credit, commonly called a credit history help determine recently reported that the national HELOC loan, borrows against eligibility and interest rates for median price of a home in the the available equity in your conventional loans. Availability United States is $272,446. Howevhome to create a line of credof assets as well as income level er, since the National Association it, much like a credit card. are some additional determinof Realtors reported a record low These funds can be used for ing factors. Conventional loans housing inventory late in 2020, the large expenses or to consolidate are traditionally 10-, 15- or average house price has been rishigher-interest rate debt on 30-year notes and will require a ing rapidly nationwide. The Fedother loans, according to Bank certain percentage as the down eral Reserve Bank of St. Louis estiof America. It may be possible payment to secure the loan. The mates the median home sales price to use a HELOC to secure fundbank will determine the down at $374,900, and certain states ing to make improvements to a payment requirement, which is have much higher prices. WOWA, home for those who want to flip typically somewhere between 3 a real estate and finance technolit as an investment property. and 20 percent. ogy company, says the average sale price of a home in Canada was ► FHA loan: A Federal Housing ► Private money lenders: Individuals investing in real estate Administration loan is issued by $679,051 in July 2021. who do not intend to use a an FHA-approved lender. These Most people do not have property as a primary residence loans are designed for low-to$300,000 to $600,000 in savings may turn to private money moderate-income borrowers, on hand to purchase a home in lenders. These investors can according to the financial guide cash. That means they’ll need to tap into capital from personal Investopedia. FHA loans require rely on financing to pay for their connections and lend at specilower minimum down paydream homes.
fied interest rates and payback periods, according to Fortune Builders, a real estate investing resource. Keep in mind the interest rate will likely be higher with a private lender than through a conventional lender. The repayment term also will be shorter. ► VA-backed loan: The U.S. Department of Veterans Affairs has a program for acquiring loans through conventional lenders that will be partially guaranteed against loss through the VA. This enables a lender to give better loan terms, such as the option to pay no down payment. Interested parties need to qualify for a Certificate of Eligibility and then work with qualified lenders. People have several options to finance the purchase of a home. These loans can help make the dream of home ownership a reality. Potential buyers are urged to speak with mortgage professionals or financial planners to consider their options.
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