Financial Decisions When Buying a Home

Who can buy a home?

Just about anyone can buy a home. It's just easier for some home buyers than others. There is a loan for just about anyone. The difference is that some will qualify for the best interest rate, terms and conditions. If you have good credit, sufficient income to qualify for the home price you wish, you will get the best rate. If you have damaged credit, you can still get a loan, you'll just pay a higher interest rate to compensate the lender for the additional risk. If you have low income but lots of cash, you can still get a loan. You'll just pay a higher than the best interest rate since the lender is taking a bigger risk. These loans are known as "sub-prime" loans.

Some examples of folks who utilize the sub-prime loans are:

• Buyers who have damaged credit, but sufficient cash to make a good down payment.
• Buyers who have low income but sufficient cash to make a good down payment.
• Buyers who have good credit, cash for down payment, but high debt.
• All of the home buyers above can get a home loan, but the interest rate will be approximately 2.5% or more higher than a conventional loan.