Buying a home often requires a lot of thought. For most young people it requires taking certain steps to ensure that their finances are in an acceptable state. To be approved for a mortgage loan, most lenders will often want to see acceptable proof of income, a sizeable sum of money that will be used as a down payment on the home, and a good credit score. The requirements for getting a mortgage loan often vary with the type of loan for which you’re applying.

Not everyone can meet up the requirements for taking out a mortgage loan, for this reason, some people may need to come up with creative ideas on how to finance their home purchase. Such ideas include getting a reverse mortgage, a government-issued loan, or renting to own among others. Here are some creative ways to purchase a home.

Get a Reverse Mortgage Loan

This option is best for older people, 62 and over who already own a home and want to buy another home. A reverse mortgage allows borrowers to borrow against the equity they have in their homes. Borrowers can get the money from a reverse mortgage in a lump sum or as monthly payments and this money can be used in any way the borrower deems fit. They do not have to pay back this money until whenever they sell the house or when they pass. Younger people may not qualify for a reverse mortgage and would have to try other options for financing their home.

Get a Government-Issued Loan

As the name suggests, you can get a mortgage from government agencies such as the Federal Housing Administration (FDA), Veterans Affairs Mortgage (VA), and USDA loans. Unlike conventional loans, government-issued loans are easier to get. The credit score limit for these loans is usually 580, but it could get to 600.

Different government loans are made for different demographics. VA provides loans to active military personnel and their families with low-interest rates. USDA provides loans for lower to middle-class people with low-interest rates. And FDA provides loans for everyone and offer lower rates than conventional loans, however, you need to pay a down payment of 3.5%.

Try to Get Seller Financing

You can try to get rid of any financial intermediaries and negotiate directly with the seller. This way you’ll be bypassing the lawyers, tax, and stamp fees, and there is a lower financial burden to carry.

In this process, you hand over the mortgage management to the seller and instead pay the seller through installments over a course of an agreed time. It does have an interest rate higher than the standard interest rate on a mortgage, along with down payments.

This is especially beneficial if you’re not qualified to get a loan through banks and other financial agencies. You can contact the seller directly and arrange the home purchase.

Look for an Investor

The real estate market is full of investors that want to blossom their houses. They require someone to fix the gardens, furnish and design the interior. If you have the skills, you can contact an investor and help them out. You can live in the house for as long as you’re working. The investors also split the profit to varying degrees.

You can also ask your family, friends, or colleagues to invest in a joint house with you. The cost can be divided among everyone equally. You would still need to sign a contract and specify the terms. If you can’t find anyone close to you who wants to invest, then you can join online peer-to-peer groups, made exactly for this purpose.


You can live in a house, and pay the rent and that rent will be taken as a down payment for the house. These types of homes can be found on any rent-to-own site. You can buy the house eventually through these rent payments before the lease expires. This means that you’ll have to pay higher rent. This is a good option if you don’t have enough money for a down payment, or if your credit score is too low.

Apply for a Conventional Mortgage Loan

Conventional mortgage loans are any loans given to you for a mortgage by a non-government entity. They are typically granted by private banks, credit unions, and other private lenders. Each private lender has a different criterion that you have to meet. For example; most banks and credit unions require you to have a debt-to-income ratio lower than 50%. Down payments and credit score requirements may vary — it is typically around 620. Government loans have lower credit score requirements. The lenders also require that you have steady employment and good credit history.

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