The most common way to buy a house is to get a mortgage. The problem is you need to qualify first before you can be approved to purchase a house. To qualify, you need to get a good credit score, a sufficient down payment, employment records, and enough savings plus stable income. A mortgage is a commitment which you need to religiously pay every month or else you will need to face consequences including losing your property to foreclosure.
If you are thinking of other ways to finance your house, here are some options:
- Live off one income
Paying off cash is the best way to acquire a property without a lot of hassles. For many, this is an impossible undertaking. However, if you’re a two-income household, one way to save is to live off a single income for a few years. If you and your partner are both working and receive decent income, pay all your dues with one income while you save another income for the house. This method will be able to make you save 100% of your partner’s salary. This can be very difficult as it means you need to live a very humble lifestyle and sacrificing a lot of things for 3-5 years.
If your current home has plenty of equity, what you can do is sell it, take the profit and buy a new property. This method is ideal for homeowners with very expensive homes and they want to downsize it and live simpler. The profit that you will receive from the sale of your current property might be more than enough if you will purchase a smaller one from a Denver real estate agency.
- Get an Investor
Seek an investor and join your funds together to buy a house. There are also people who, like you, want to buy a house without getting a mortgage. Once you found your co-investor, look for a property that is within your budget. You can flip the home for a profit and then split the proceeds with your investor.
Seller financing is another option if you did not qualify for a mortgage. This is how it works: You make an agreement with a seller that you will pay the loan every month and the seller signs over the deed of the property. Since you have the deed, you become the owner of the house and the seller is your lender who you need to pay each month until you pay the entire price of the property. Though this works well, in theory, the hard part is finding a willing seller. Many sellers are pessimistic about this method because it doesn’t give them enough security.