Insula Capital Group

A couple buying a new home

4 Ways to Buy a Home

Buying a home is considered an American Dream. Fulfilling this dream, however, isn’t attainable for most buyers. Lack of funds and poor credit score are the major reasons most buyers are unable to buy homes.

Buying a home is a major decision, financially and emotionally. When you feel ready to take the leap and become a proud homeowner, the foremost thing you need to ask yourself is how you will buy the house.

Just like there isn’t one simple way to buy a home, there also isn’t one straightforward method to finance your home. From conventional methods to other types of financing methods, the list is endless.

So, let’s take a closer look at a few ways you can buy a home.

Conventional Mortgage

They are the most common home financing tool. Banks and credit unions are traditional conventional lenders that give out mortgage loans for homeowners to finance their new homes.

To qualify for a conventional mortgage, you need to have a credit score of at least 620 and a debt-to-income ratio of less than 50 percent. The number of down payments can vary, but you’ll likely need to put at least 20 percent down and also get private mortgage insurance.

Nonetheless, conventional loans tend to have higher out-of-pocket costs but lower borrowing costs over the lifetime of the mortgage loan. Conventional mortgage loans are the ideal option for homebuyers with an excellent credit score, employment history, and sufficient savings.

Use Your Retirement Savings

Although it’s not recommended to use your retirement funding before you retire, in case you’re short on money to buy your home, you can do so.

This will give you a quick and easy option to get the funding to acquire your dream property. However, make sure you know all the terms and conditions of the financing as they may vary for every employer.

VA Loans

If you’re an active duty member,  veteran, or related family member, you might qualify for the VA loan, which the Department of Veteran Affairs funds. This loan allows you to buy a home without a down payment with little to no extra costs.

A person receiving their home keys


FHA Loan

A popular loan option, the FHA allows buyers to put as little as 3.5 percent on down payment. Sellers can also contribute to the closing costs of the home for up to 6 percent.

FHA is a great loan option as there are lower down payments, and it’s easier to qualify for this loan given the less restrictive criteria. However, you should be aware that you’ll need to pay a mortgage insurance premium with this loan option.

Find the Best Private Lenders for Home Loans

Insula Capital Group is an investment company based in New York with over 30 years of experience. Our loan options range from rental properties loan programs and fix and flip financing to new construction loan programs and multifamily fixed used loans.

We offer a quick four-step application process with various other attractive features.

Contact us for more details or visit our website to explore more about our services.