If you are attempting to buy a home in the current real estate market, to say that finding sufficient lending would be an understatement, given all the restrictions and limitations bank have started to implement. Frequently, having a high credit score and a stable job is not enough to get approved to buy a home, for reasons unknown to many buyers. We can trace all of these problems back to banks and their hesitancy to loan based on current market conditions.

The Rationale

By not making loans, banks are building up a ready pool of buyers who are eager to borrow money to buy homes? By getting money from the government at for nearly nothing, banks can turn right around and loan it out to the safest credit risks, for the lowest rates, ensuring a decent return over time due to the low rates for the best risks. Even though the banks are getting to borrow money at a quarter percent, and loaning at five points plus, they are still trying to make up ground they lost in investor and customer confidence.

Doing their homework and realizing that there will be over 88 million new home buyers hitting the housing market, as reported by the census bureau, banks will be buoyed by the first time home buyers and new investors seeking to retire some day. Many changes have had to be made to the laws to allow the banks to most aggressively take advantage of the real estate industry, and that takes time.

The Best Way To Resolve This

Home owners were originally the lenders, before the era of the big banks and banking corporations. When a buyer did not have the cash to pay off a house, the seller simply held the deed and charged and collected interest until the note was paid in full. Acquiring your real estate in this way is the smartest way to buy your property today.

Even if you have to purchase a building lot and wait a few years to build on it, you are in a far better off situation financially than if you involve a bank. When you total up all the added fees and the interest payment banks will collect, and the insurance that you have to buy for them to make the loan, it really seems like you are the one risking instead of them.

The simple solution is for Americans to be patient and not purchase a home until they have at least 20% saved up, then buy land. Owning the land yourself will always make building your home much easier to finance. Getting back to a frugal mindset that values cash more than materialistic possessions will help you appreciate your money a lot more, and help you grow it more than anything.

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