Buying or Building: 10 Ways Payday Loans Can Help You Score Your Dream Home
What if you could find the key to your dream home without even leaving the house?
The largest impediment in buying a home are the costs involved. From various fees to the downpayment itself, the money may be a larger amount than many can afford.
One possible solution to your problem is payday loans. These loans are easy to get and can be obtained both offline and online. Despite this, many prospective homebuyers don’t understand how all of this works.
Ready to snag that dream home? Keep reading for our awesome guide to ten ways that payday loans can help you achieve your housing dreams!
What Are Payday Loans?
Before we dive into how payday loans can help you buy a home, we need to answer a fundamental question: just what is a payday loan, anyway?
These are short-term loans that are easy to get but may carry a higher interest rate than other loans. They are called “payday loans” because such loans typically last for one month, allowing you to pay it back by your next payday.
These loans are very versatile and can suit many different needs while still being secure. And if you’re looking to buy a home, there are ten unexpected ways that online payday loans can help you out.
1. The Credit Game
Your credit is super important when you’re trying to buy a home. And sudden changes to your credit can actually jeopardize things when you’re getting ready to close on your dream home.
Because of this, many couples play “the credit game.” This means that they deliberately use only one person’s credit to try to finance the home.
The benefit of this is that the other person can then worry about financing other costs or furnishings without disrupting their overall credit. But what if this second person needs a quick dose of additional cash?
Online payday loans are easy to obtain and quick to process. This means that a couple will be able to get the money they need without disrupting the credit of the main person financing the home.
2. Financing Temporary Needs
Arguably, the most annoying thing about buying a home is that it feels like you have to put your life on hold. This is because your every financial decision must now be followed by a question: should I be saving this money instead of spending it?
It’s true that many prospective homebuyers are squirreling money away into a savings account that can help pay for the downpayment and other house-related costs. However, this can have some very annoying side effects.
For instance, you may have put so much cash away that it becomes difficult to access it when some kind of financial emergency pops up. When every second count, then it is important to have a game plan to get your money.
As we said early, online payday loans allow you to apply and be accepted without ever leaving the house. Combined with the quick payment, you’ll get the money you need right when you need it!
3. The Downpayment Sweet Spot
Out of all the financial costs associated with buying a home, a down payment is the most stressful. This is because depending on the cost of the home and the amount of the downpayment, this might be a very large amount of money.
So, we have some good news and some bad news. The bad news is that you typically can’t use loans (payday or otherwise) to finance a downpayment. However, payday loans can help in other ways.
For instance, you may choose to finance your home with an FHA Loan. Such loans require a downpayment of 3.5%, which is far lower than the typical 10%.
Payday loans may be able to help your partner finance some of your assorted financial needs while you stick back money for the downpayment. In this way, you can save the money you need while knowing that you’ve got a safety net in the form of online payday loans.
4. Cash First, Mortgage Later
Obviously, the traditional path towards buying a home is obtaining a mortgage. But would you believe that in some areas, the best process is “cash first, mortgage later?”
In crowded and competitive markets, some buyers have chosen to use cash upfront as needed and only get the mortgage when the sale is finalized. This is admittedly risky, though, in terms of both time and money.
If you think this might be the path for you, then payday loans can help your partner take care of various costs while you put away the money necessary to be your upfront cash. This means that online payday loans can open doors for you in a pretty exciting way.
5. Closing Costs
Closing costs are another intimidating factor when it comes to buying a home. Just when you thought you were completely in the clear, BAM: here comes another major fee for you to have to pay.
If possible, many home buyers try to get sellers to cover some or all of the closing costs. However, when it’s a sellers market, you may not be able to do that.
In these cases, the only option left is to pay the closing cost. For individuals or families who cannot pay the amount on their own, though, this can end up being a dealbreaker.
The only option at this point is to get help from a loved one. And in this particular case, payday loans can help out in a big way.
Home loans such as the FHA Loan allow you to seek help with closing costs from a family member. However, your family members may not immediately have the thousands and thousands of dollars on hand to help you completely finance the closing costs.
With online payday loans, your family members may be able to add to the money they already have with an easy, short-term loan. They can then provide that money to you and, with the bank’s blessing, help you get the home of your dreams.
6. Inspection Fees
One of the reasons why buying a home is so nerve-racking is that you’ll worry about the future. What if you buy an expensive home only to later find out that there was a major problem that you overlooked?
This is why home inspections are such an important part of the home buying process. A qualified inspector can check for things such as termites and any other issue that might spell trouble for you in the long-term.
Unfortunately, such inspections are usually not cheap. In fact, you can easily spend between three and five hundred dollars on an inspection depending on the size of your home. And when (not if) they find something, you may need even more money to fix the problem.
You may not just have this money laying around. However, without an inspection, you won’t be able to buy the home of your dreams!
Payday loans can help you cover the cost of the inspection if you are not ready to pay for it outright. For maximum credit safety, though, it’s good to have your partner take the payday loan out in their own name.
7. Last-Minute Emergencies
The old Boy Scout motto is to “be prepared.” Some people naturally ask “be prepared for what?” And the short answer to this question is “everything.”
Buying a home is stressful and difficult for many reasons. One of the biggest reasons, though, is that you don’t always know what could go wrong during the process.
We’ve talked earlier about how payday loans can help you pay for some of the additional costs that you know are coming. And these costs range from paying your closing costs to covering the home inspection fees.
However, it’s impossible to predict everything that could happen over the course of buying a home. In fact, if you could predict emergencies, then they wouldn’t be emergencies!
This is one of the most compelling reasons that we love online payday loans so much. While you don’t know what kinds of emergencies may happen, you can go ahead and have a game plan for dealing with it.
Emergencies can happen very quickly and turn into very fluid situations. In order to overcome such obstacles, you must have a solution that is equally flexible and fluid.
8. Saves Time
When it comes to buying a home, one of the things that take many people by surprise is how time-intensive it is. Put shortly, the entire process of buying a home is a lot like taking on a part-time job on top of your other responsibilities.
Unlike a real part-time job, though, this new gig will actually be taking your money. And along with your money, it will be taking a whole lot of your time.
This can place you in a kind of “perfect storm” of emergencies. Specifically, you may be in a position where you suddenly need additional money, but due to the time constraints of house-hunting, you don’t have the time to hustle up the amount of money that you need.
Of course, this is where online payday loans come in. Not only can such loans provide the money you need, but they save a lot of time while you are at it.
First, being able to apply for the loans online is a large time-saver in and of itself. The last thing you want when you’re in a hurry is some credit offer where you have to wait for the Post Office to bring you something.
Second, you get a decision very quickly. And with it being a payday loan, it’s very easy to get approved.
Finally, you get the money really quickly, with not a minute wasted!
9. Stable Dependability
We’ve touched on this a few times, but now we want to focus explicitly on one of the best payday loans features. What are we talking about? Their dependability, of course!
Part of why people get anxious about applying for loans and for credit is the fear of the unknown. Even something that sounds simple such as a credit check can actually be a major source of anxiety.
This is because a variety of factors can affect your credit from month to month and year to year. It’s like a minefield of unwritten rules, and you never know if you have overstepped one of these rules until it is too late and your application is denied.
For instance, a few late payments can add up very quickly and jeopardize your credit score. And avoiding using credit altogether can, ironically enough, also impact your score.
In short, traditional loan and credit applications are unpredictable. But online payday loans are always stable and dependable.
Regardless of your credit, you understand the terms and rates right up front. When you’re buying a house and everything seems so difficult to keep track of, this is a really important quality in a loan!
10. No Ongoing Costs
Sometimes, people dismiss payday loans by pointing out how short their term is. “Why,” ask critics, “would I borrow money only to pay it back in thirty days?”
It’s true that there are financial needs where a payday loan is not the best choice. But for many of the scenarios we outlined earlier, the short term of these loans is a major benefit instead of a disadvantage.
Why is a short term beneficial? We’ve got three magic words for you: “no ongoing costs.”
For most home buyers, there is a period of adjustment after buying a home. This is because your monthly payment is very likely going to be higher than what you were paying on rent (and could go higher depending on mortgage type).
With more traditional loans or credit cards, you may rack up debt that you have to pay back over several months or even several years. And this just adds to your existing bills which have already gotten higher for each monthly payment.
With payday loans, you borrow what you need and quickly pay it back. No muss, no fuss, and no ongoing costs.
The Bottom Line
Now you know how useful payday loans can be. But do you know where to apply for one?
Here at Bonsai Finance, we provide the financial solutions that you need. To get started on a payday loan today, come request your loan today!