Various Methods You Can Get Financing To Buy Your Next Home

The next time you are ready to buy a home, remember that there are several different ways you can get the financing to pay the seller for the home. And you don't have to have perfect credit or any credit at all, actually. Here are some different types of financing methods you can use to buy your next home.

Mortgage Broker

One of the best ways to get a good deal on your home financing is to go through a mortgage broker. A mortgage broker has access to a wide variety of lending programs through various wholesale lenders to get you a competitive interest rate on your mortgage. Because a mortgage broker does not work for a specific bank or financial institution, they can search through all the available loan programs to find the right loan program for you.

The pool of loan programs are offered to the mortgage broker at a discount, which they mark up and can opt to pass on part of the discount to you. This allows you to have the ability to get a great rate from a broker who is upfront to you about their fees. And if your credit is not perfect, they can work with you to find a good rate for your situation.

Bank Lender

You can also talk to your local bank or credit union about getting mortgage financing for your next home purchase. Your bank will usually loan you their own funds and you will make your mortgage payment directly to them. The application and approval process is also handled in-house with your bank from start to finish until you pay off your mortgage.

This type of lending is considered retail lending, as you get the loan directly from the retailer lender, who is your bank or credit union. But because you are already a customer with them, you can set up your mortgage payments and documentation to be handled automatically through your current portfolio of accounts with them.

Seller Financing

Another option to buy a house is with the use of a seller who is willing to carry the loan for you. This situation is referred to as a seller financed sale, which the seller needs to be open to handling. When you and the seller agree to a purchase price, you also decide on the terms of the mortgage, such as the interest rate and loan length. It is important to have the contract agreement in writing, as you make payments to the seller to fulfill the loan.