In order to help the many people who do not have sufficient cash to purchase a property outright, there is the option to apply for a loan. Nowadays, in addition to traditional bank financing, there is the option to apply for in-house financing. So, what are the differences between the two, and which one would be better for you?
In-house financing is when a business assumes all risks associated with the loan and uses its own funds to make loans to clients. There are several advantages, the main one being that it has a faster application process. You may apply either online or in person. In addition, it is easier to apply if you have bad credit. This is because the seller may consider factors other than your credit score, or they may not perform a credit check at all. The process is all simplified, and you usually must submit proof of employment or any other document to establish your major source of income.
On the other hand, bank financing is the more traditional route to a loan. There are numerous ways that banks can lend a business money, but whatever way, you will have to go to lengthy measures to explain your firm, its history, and also predict future revenue. The advantages are the fixed rates, though they may be adjusted in certain circumstances such as economic conditions. The next benefit is that you could have more flexibility in the payment term time. The main downsides are the complicated, lengthy application process which can take several months. In addition, banks always require collateral, regardless of your credit score.
On the whole, it is probably a wise idea to think about your situation and which option would suit you best when taking out a loan. Either way, our friendly team here at Eminence Mortgages is here to support you every step of the way and offer the best advice for you.