Lake Tahoe Home Financing
So you’ve found the perfect Lake Tahoe home for sale? Now you need to buy it! There are many options for financing a Lake Tahoe home purchase which is good because there are some factors of home purchase that may not allow for conventional financing. In addition to a buyer qualifying to purchase a home there are qualifying factors for the home or condo or lot. Many buyers for north Lake Tahoe real estate are purchasing a home or condo in addition to their primary residence. There are lending laws in place that don’t allow for a buyer to borrow money to purchase a home if they already own 4 other properties. Some condo types in north Lake Tahoe do not qualify for conventional funding due to the low percentage of primary occupants. If traditional financing does not work for your particular circumstance, there may be other more creative financing options available.
Types of financing for your new Lake Tahoe home
Conventional Loans- Traditional loans taken through banks or credit unions. Current rates are under 5%. Most require a 680 credit score or higher and full income and debt documentation for approval. These loans typically require a 20% down payment.
FHA- Allows home buyers to use a lower down-payment amount. There are limitations on income and expenses.
VA- This is a great option for active service members and veterans. There are good terms for little or no down payments or pmi.
Owner Finance- This option can be beneficial for a buyer unable to qualify for a traditional loan. It can also be beneficial for a seller unable to find qualified buyers and make a good rate on an existing asset. Usually for a short time, about 5 years, the seller will collect payments from the buyer until the note comes due. A buyer will need to find financing prior to the end of the loan.
Lease Option- A lease option is like a rental but, allows you the right to buy the property within two or three years. The lease can be arranged so a portion of the monthly lease payment is going toward the purchase price of the home.
Private/Hard Money Lender- Typically the rates will not be as good as a conventional loan and you will likely need a larger down payment. A hard money loan will allow you to borrow money quicker than a traditional mortgage. If you can not qualify for a conventional loan or are purchasing a property that doesn’t qualify for a traditional loan, this may be your best or only option.
Cash- “Cash is King” especially in a competitive real estate market. This is the only way to avoid financing pitfalls altogether.
With some of these things in mind when looking for the perfect home and financing to buy it your local agent and lender can best advise you on how to proceed.