NEW YORK (7/3/14)--Even with historically low interest rates, a traditional mortgage just won't work for some potential homeowners. In those cases, there are options, but ones that should be carefully considered, Credit Union National Association interim Chief Economist Mike Schenk told Fox Business Wednesday.
Consumers can look to borrowing funds from a family member or their own 401(k) or consider a lease-to-own type of contract.
Schenk advised borrowers to do their homework because "in some cases ... the transactions can be complicated and confusing."
Wannabe homeowners may be tempted to tap into a retirement account to cover a down payment, but Schenk said, that's "almost always a bad idea." Early withdrawal penalties and a less stable retirement situation could be the consequences.
Other experts suggested the debt averse could take out a loan against the principal of a life insurance policy or lease-to-own contract in which residents pay the owner each month. The ultimate option for those who don't want a mortgage loan is to save up and pay cash.
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