The recession that currently prevails in the global market has affected almost every industry and business. The real estate market is no different, in fact it can even be said that the real estate market is one of the most affected by the large amount of cash that is needed for advances and advances. Now, due to the recession, most people are unable to raise such large amounts of cash for down payments and are therefore turning to other sources to acquire the financing they need. The following are some of the most common methods through which people finance their real estate investments.

Bank loans

This is the most used method to raise funds around the world, in this method a loan is requested from a financial institution such as a bank, the applicant must present their income and expenses, as well as their credit rating. The bank then decides whether the applicant meets their requirements or not before approving their application and if they meet them, the bank lends them the money. Financial details, such as the interest rate and repayment period, are also worked out between the two parties. This is the most widely used method of obtaining financing, but in recent years, due to the recession, many banks have tightened their credit policies and it has become increasingly difficult for people to obtain loans.

Associations

To raise funds, more and more people turn to associations, these partners are usually close family and friends or other people you can trust. This way of obtaining financing is becoming increasingly popular as not everyone has a good credit rating and therefore cannot borrow from the bank. A lawyer draws up the legal document between the two parties involved, this document is very important as it describes the terms of the partnership, for example, who will pay the taxes, how the repairs and the sale of the property will be shared with the consent of the other partner. Association laws differ from state to state, so it is wise to first find out the association law in your state to avoid the risk of fraud or any other miscommunication in the future.

Government loans

The government also makes loans to the public interested in buying their houses. Technically, although it is not actually a loan and is more of a government guarantee for the institution you are borrowing from, it will not default. This is known as a Federal Housing Administration loan; Typically, this type of loan has a lower interest rate and a more relaxed repayment plan than traditional loans. You can make use of this loan facility even if you don’t have the best credit score, in most cases only a 3 percent down payment is required, and in some cases you may qualify for a no down payment plan which it means that you do not have to put a large amount of cash as an advance and you only have to pay the amount of interest for the fixed time.