The American Dream; what does it mean to you? People have different jobs or hobbies or passions in life, but one constant remains the same among us, and this common thread that unites our dreams is that of Home Ownership! Unfortunately, in this current economy, achieving the dream of homeownership is becoming more difficult than at any time in recent history. Too many Americans follow the unwritten rule of homeownership that tells us to ‘Find a Realtor and Get a Bank Loan.’ With thriving job markets, lower inflation, and less credit restraint in past economies, that ‘rule’ may have made sense to follow.
But our current economic system is making it difficult for the average person to achieve the American Dream of Home Ownership. In times of unstable job markets, with double-digit unemployment forcing people to become self-employed to make a living, the banks require a W-2 stable job history to issue loans. In times of a great credit crisis, the banks require stricter credit scores than most people can achieve. Fewer and fewer honest, hard-working Americans who are used to following the ‘traditional rules’ for owning a home have the opportunity to own their own homes Web Posting Pro.
What if you could achieve the American Dream of Home Ownership without the assistance of a bank? The purpose of this document is to allow motivated home seekers an opportunity to write a New Rule of Home Ownership that allows you to declare your freedom from the services of a Bank to partake in your piece of the American Dream of Home Ownership! To understand the New Rule of Home Ownership, let’s take a closer look at the existing rules of purchasing a house with Traditional Bank Financing.
The first part of the Traditional Bank Financing focuses on Qualifying for a Loan. While many different loan packages exist, the most common loan written in today’s market is an FHA Loan, and therefore, we shall use their guidelines as an example. The following are guidelines for an FHA Loan:
o FHA Loans require a minimum credit score of 620 to be eligible for a loan
o FHA will require 3.5% down on the home. This down payment MUST come from your account. You are not allowed to borrow from friends, family, or anyone else. You must document where the funds for the down payment came from. Specifically, the source of the down payment must be from your personal checking, savings, or retirement account and CAN NOT be borrowed!
To work with most Realtors, you must first get pre-approved for a bank. Many Realtors won’t even show you a house unless you can prove that you can afford and receive financing for the property. This painful process of pre-approval from a bank can take 2-3 days and involve the following steps:
o Proof of Creditworthiness
o You must provide 2-4 years’ worth of tax returns!
o You must provide your last 4 paycheck stubs if you are an employee or an updated Profit and Loss statement if you are self-employed, a business owner, an independent contractor, or an entrepreneur. However, if you cannot show a consistent pay stub as proof of income, then you may want to skip ahead to the part of this document where ‘Owner Financing’ is discussed, as you will find it increasingly difficult to qualify for a mortgage.
o Your bank may require you to pay off another debit to help improve your credit score to qualify for the loan
o And the worst part… this proof of creditworthiness is done throughout the entire home buying process! Even once you qualify and pick out the home of your dreams, underwriters at the bank will have you go through the same process to make sure you still qualify.
Now that you are pre-qualified for the home of your dreams, you may finally begin the process of working with a Realtor to find your new home.
Once you’ve found your home, the Traditional Banks will want an inspection performed on the home and may require the seller to fix EVERYTHING for the bank to finance your loan. Some people just want a small discount on the house, and they will do their own repairs; however, a traditional bank often will not allow you to do this! These small fixes may add to the total price of the house.
Also, expect to pay Realtor fees, bank fees, filing fees, “point buy down” fees, loan origination fees, closing costs, title fees, surveys, appraisal fees, and anything else imaginable for which to be charged. Though many of these fees can be rolled into your loan, over the long term, you may be paying an extra 10% in unnecessary Financing Fees that are loaded into your loan! What if there was a quicker, easier, and less intrusive way to take your share of the American Dream? What if you could look at homes without having to pay a Realtor fee, pre-qualify for a loan, and go through a 3 month home buying process? After all, we ARE in a BUYER’S market in Real Estate, so why shouldn’t we be able to buy.
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