Buying a House with Bad Credit Is Still Possible

2011 April 23

Buying a house with bad credit is still possible but not the way most prospective home buyers think. During the wild west days of mortgage lending before the real estate bubble busted, buying a house with bad credit was as simple as calling up most any mortgage lender or mortgage broker.

 Buying a House with Bad Credit Is Still Possible

There were tons of mortgage loans available for home buyers with poor credit. Some people say that during those days, all anyone needed to get a mortgage was a pulse. And I have to admit, I originated mortgages during that period and it almost seemed that way. Often the biggest problem in getting a home buyer in their dream home was sufficient income to meet the lenders guidelines and even for that, often all we had to do was go with a different lender who allowed higher debt to income ratio.

Alas the ‘good old days’. While buying a house with bad credit today is not as easy, it is still very possible. So what’s the trick to buying  a home with bad credit today? It’s really as simple as two words, owner financing. You see, in this very depressed housing market, there are millions of desperate home sellers who are willing to owner finance in order to sell their home. And guess what, they rarely check the credit of their buyers when owner financing. How do I know this? As a mortgage buyer, I see tons of private mortgages people are trying to turn into cash and nearly all of them never checked credit on their buyer. They were so excited about getting rid of their house that they didn’t even bother to check their buyer’s credit.
So, if you have bad credit and don’t want to wait until you increase your credit scores, shop for homes that either say, “owner financing available” or for homes for sale where the home owner has a lot of home equity in or has no mortgage on their home. These home sellers are often ripe for considering seller financing. Many will sell using owner financing with only 10% down and an interest rate of 6% or less. I’ve seen some with 5% or even less down. Also, many will even amortize over 30 years and the closing process is simple and fast. So take heart, you’ll need to put in a bit more time in your home buying efforts but you can purchase a home with poor credit. Good luck in your search.

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