Many real estate buyers have experienced great difficulty in completing their home purchase over the last few years, due to a lender side issue other than the normal credit and job confirmation issues. I have seen many potential home buyers with credit scores over 700, and a steady employment history, get turned down for financing altogether. We can trace all of these problems back to banks and their hesitancy to loan based on current market conditions.

Their Logic

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 Solution To Our Banking Problem

Home owners were originally the lenders, before the era of the big banks and banking corporations. That is right, the home owner simply allowed the buyer to pay them off over time, interest accruing of course, until the debt was paid in full. Acquiring your real estate in this way is the smartest way to buy your property today.

Let us just say you have to purchase a lot and save up the rest of the money to build it, you are way ahead of the game than if you would have borrowed through 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. Whether you use an owner carry note or can cash out on your land, you have more freedom to lead the construction of your home from there. Reinforcing a mentality of frugality will make your money go further than you though, and will keep you from being tied up in possessions that can limit your financial freedom.

The author enjoys writing articles about homes for sale in boise idaho & reos in boise idaho. Click on the above links to learn more about these topics!