If you do not have enough credit to borrow money?

I find this too complicated myself. I have thought of buying a house but as you mentioned it is hard to get that much money even for a downpayment. After loaning from the bank what's next? you have to pay off the loan and the monthly mortgaged on the house so that is double the amount your are going to pay. Frankly right now my hands are up in the air. I see the best way to go is to save for the downpayment and then pay off the monthly mortgaged so at least you only have to pay one bill for the house.

We have built a two-door apartment on a lot that i inherited from my mom. Money for the total house construction came from our savings (5%),borrowings from friends/relatives (45%)and from the proceeds of a home loan program (50%)of a government institution (HDMF- Home Development & Mutual Fund) Payment for the down payment to our contractor came from our savings & some borrowings from our friends. We were required to build our equity before we can avail of the home loan. Just like banks, they can only lend you at most 80% of the appraised value of the property. So, instead of availing the maximum amount we were allowed at HDMF offering 10.5% per annum, we just availed the loan amount equivalent to 7.5% per annum. The remaining costs we need came from borrowings from our relatives. If you don't have much credit you can borrow from friends/relatives who are more than willing to lend you. It sometimes pays, to maintain good relations with other people. But be sure you should learn to keep your promises, specially the time you agreed to pay them. Now, my family relocated again and we purchased another house. We opt to buy a house rather renting because I don't want to waste money on rents. Why rent when you can use the money to cover your amortization? We had our previous house rented at an amount equal to thrice our monthly amortization. So, basically the house is paying for itself. Let your money work for you. Invest while you're still young but don't forget to have fun!

The most important thing that you have to remember is that you will be paying off this loan for a very long time so the wise thing to do would be to take one year to work on improving your credit. Your credit determines what kind of loan and interest rate you qualify for. In addition to banks, many credit unions offer home loans to members so if you can join one, that might be a good lender to try.

Banks today are very reluctant to lend money to people unless their credit is pristine. If your credit is bad, the only thing that you can do is work on it until you have a good track record and then you can apply again. You can do what your friend did and increase the amount of your downpayment so that the bank is more willing to lend. Lastly, you could try to seek a private source of financing but that would be much more expensive than traditional financing and those sources may even have dried up after the huge housing debacle. Good luck

i won't borrow knowing i won't be able to pay.

If you don't have the 20% down payment ready not many sources will lend to you unless you have a great credit history. Their reason is the fact you have so little saved shows your nature is not to save and they are afraid you will default on the loan. I would strongly suggest not using the method above but being more traditional and spending a few months improving your credit history and also saving a few more dollars for your down payment. Best of luck.

For any type of loan, good credit is crucial, if you have bad credit, it makes it more difficult for a lender to agree to lend you the money. It may not matter that you have a large downpayment, most banks simply wont lend to you unless you have equity or collateral somewhere. I have no credit myself, so I find myself in a situation where I can't get a loan anywhere, but I have to deal with it. There's nothing I can do.