If you ever thought that you will not qualify for a housing loan due to your bad finances, it is time to rejoice. Most people are under the common misconception that houses can only be funded through a mortgage loan. This false belief is not only prevalent amongst Australian citizens but also in other countries as well. With due diligence, it is possible to find another way to fund your home instead of running behind finance companies and loaning agencies. These alternatives will not only offer you much flexibility but will also future financial security and peace of mind.
These options might be ideal for those who have insufficient credit scores and pending student loans. There are various possible alternatives than to take home loans Australia andbe assured since most of them are reliable and effective. If you are one of those citizens in Aussie who is excited about the prospect of moving into a new house, here are some funding methods that will be your redemption.
Kith and Kin
Most people are not very enthusiastic about asking for financial help from family and friends. The question is, if our own family cannot help us out, how can we expect a stranger to do the same? Borrowing from friendlier sources has its own benefits too. Firstly, there are no strict terms and restrictions. You will not have to explain yourself to the individual like you have to in a bank since the person will be already aware of your situation. When it comes to repayment, the friend or relative will be more generous with the timeline as well. If you do get stuck during the repayment process due to an unavoidable financial crisis, such as sudden medical expenses, the lender will be more sympathetic to your situation and will be lenient with the payment. Most importantly, the interest rate will be kept to a minimum.
This is a system where the landlord of the house of your choice will finance your purchase. Although this does not happen quite often due to obvious reasons, you will notice such dealings in areas in Australia where houses do not get sold quite often. When a house has been in the market for quite too long, its value and thereby the price will reduce with time. It is not quite profitable for the seller/owner, but is does have its advantages for the buyer. For instance, you will be able to probably close the deal faster because you have the upper-hand since the seller is desperate to sell the house. On a negative note however, you might be charged with high-interest rates since the seller is at considerable risk when making this deal. Moreover, even though the purchase is lucrative to you, your purchase will be in one of the remote places in Australia.
Rent to Own
This is yet another possibility of financing your house without having the need to refer to traditional loaners. This system is quite straightforward. The buyer will agree to pay the rent for the house for a particular period of time. After the deadline is over, he/she will be under the obligation to buy the house for themselves. This is quite a beneficial offer when considering the fact that you will not have to pay interest rates after the due date since you technically own the house. Also, the rent period gives you sufficient time to collect the necessary money to purchase the house. The terms of this system are quite flexible and can be altered according to the customer’s convenience and preference. On the other hand, this process has its disadvantages too. Firstly, the buyer will be subjected to pay a high interest rate during the rent period. Although the rent period could be adjusted, the interest rates are usually fixed. Furthermore, if you do not decide to buy the house due to change of plans, it will result in waste of money. Thus, it is very important to consider one’s financial situation before agreeing to this deal.
It is also possible to refer to various government and private institutions for financial help. You will need to produce a lot of documents such as insurance and credit reports to get approved since many Australian citizens apply to such organizations.