Creative Ways to Buy a House

buying a house

Loan-to-value ratio minimums render many mortgages in the Beehive State prohibitive. You should not blame lenders for refusing to finance the entire cost of a house, though. Such restriction helps keep a financial bubble from forming and prevent another economic disaster.

However, not all borrowers fail to qualify for a mortgage because they can’t afford to buy a property. Some of them lack the imagination to save for a good-enough down payment.

If you hope to own one of the hottest homes for sale in Daybreak, Utah, or any nearby community, consider these strategies to cover the deal’s upfront costs:

Deposit Your Mattress Money Early

Rule number one for producing a down payment when buying a property is seasoning your cash reserves in a savings account. A lender only cares about verifiable money. Without any paper or digital trail, a mortgage lender will refuse to accept an asset to beef up your down payment.

Usually, you need to season your cash reserves for 60 days. A lender will typically ask for your past two bank statements to check your recent financial activities. Any large deposit will set the alarm bells ringing, triggering a lender to scrutinize your financial capability even further.

If you have to keep money in a jar, under the mattress, or any other safe place you can think of, deposit it to the bank account you wish to present to your prospective lender two months before you apply. This way, the cash will become a reliable asset.

Seek Donations from the Local Government or a Non-profit

A monetary gift is an acceptable supplement to a down payment, but do not limit your options to your relatives. You can also ask grant funds from your municipality, a nonprofit organization, or even a church. As long as you include all the essential information about the donor in your gift letter, a lender will most likely accept it.

Start Using a Savings App

using a phone

Some mobile applications can automatically funnel some of your money into a savings account or other investment vehicles. You can set a fixed amount to set aside every month or choose a percentage of your transactions. Either way, apps like Digit, Mint, and Acorns exist to support your forced saving initiative without disrupting your usual spending habits.

Participate in a Round-off Banking Program

Some financial institutions have a program that rounds off purchases to the nearest dollar and stow away the surplus to a savings account. It can be as beneficial as a savings app. Ask your bank or credit union for such a program.

Get a Rent-to-own Deal

Technology-driven mortgage lenders offer rent-to-own real estate deals that allow borrowers to live in the house they intend to buy while saving for a down payment over time.

If you find such a lender, the property will be bought on your behalf to take it off the market. Then, you will lease it for a certain period and earn credits as you occupy it, which you can use a down payment if you still want to purchase the property.

Rent-to-own arrangements are different, so understand the specifics of your prospective program before signing on the dotted line.
The down payment requirement is not an insurmountable obstacle. You might struggle to meet it, but think of it as a necessary hurdle to make sure you can afford to buy a house as early as now.