- The Latino community in the US is one of the most difficult to obtain a mortgage. Therefore, at Globe Live Media we explain how to buy a house in the US without applying for a mortgage
Although the Latino community has become a force in the US real estate market (according to the National Association of Hispanic Realtors, Latino homeowners in the country increased by 48.4% in the year 2021), there are not a few who have had difficulties applying for a mortgage and using this financing to buy a house.
In fact, in an interview conducted by National Public Radio (or NPR) with Lot Díaz, Vice President of Financial and Real Estate Empowerment with the Latino group Unidos US, this specialist indicated that there is an 81% greater probability that Latinos are unable to obtain a traditional mortgage compared to non-Latino applicants.
For this reason, at Globe Live Media we have compiled some of the options that Latinos have to obtain financing to buy a house without having to obtain a traditional mortgage.
1- Request a private loan
Private loans are generally financing obtained through specific individuals or even members of your family who agree to lend you the money to buy a home.
In this way, you can avoid certain aspects such as the credit criteria of US banks. However, it is important to establish clear conditions and detailed terms around this loan, regardless of how close the person who can grant you the financing is.
2- Make an agreement directly with the seller of the house
In some cases, you may be able to make a formal agreement directly with the seller, who would then serve as the primary lender.
This way, you may be able to save some of the costs of a traditional mortgage, and you can negotiate the initial deposit, monthly payments, and even interest rates.
3- Look for sellers that offer the rent-to-own modality
Rent-to-own programs are rental agreements in which tenants agree to rent a property for a specified period of time and allow the option to purchase it before the lease is up.
To do this, the tenant or buyer must pay a single initial fee, called the option fee (which is usually non-refundable), which allows you to be able to buy the home over time. In this way, you are not “tied” to a formal mortgage, it allows you to save during the rental period and eventually buy the house.
4- Buy a house whose mortgage has been foreclosed
Typically, foreclosed properties are resold at lower prices in the US real estate market. This way, buyers can take advantage of discounted homes, which can prevent you from requiring a mortgage.