Terrible Credit Keeping You From Home Ownership?
If you\’ve gone through bad financial times in the past, you may have given up on the thought of owning a home. Prior to the current mortgage industry melt down, an individual who filed bankruptcy could qualify for a home loan in just over a year. But today\’s lending climate has made it nearly impossible to qualify for a loan with poor credit.
Banks tend to favor applicants with an excellent credit history. If you\’ve suffered from previous financial problems, don\’t think you\’ll never be able to buy a home. By re-prioritizing your monthly budget and adhering strictly to it, you can build a positive credit record to qualify for a mortgage loan. To be realistic, this process may take up to two years before you see significant results.
One good strategy is to negotiate with a potential bank to understand your money problems were caused by situations out of your control (such as marital dissolution, a failing business, medical problems, and loss of a job) or show proof you\’ve taken steps to be responsible with your money. You may be able to persuade a potential bank to offer you another opportunity at home ownership. However, you need to wake up to the reality that rebuilding your finances requires extensive planning, preparation, and hours of labor.
If you haven\’t suffered a devastating bankruptcy or lived through a financial dilemma, but have poor credit due to other predicaments such as self employment or just starting a new job for less than two years, you\’ll still struggle with getting a home loan. Because the mortgage market is continually fluctuating, it\’s best to consult with a reputable home loan representative or mortgage professional about your choices.
Another alternative to traditional financing is to consider owner-will-carry (OWC) financing. If you have no established credit, minimal savings, and a low paying job, this strategy can help you get your foot into the real estate market. Try locating mature homeowners who are fed up with managing their rental properties, but still desired the monthly income a rental property brings. These homeowners make great participants for owner-will-carry financing.
By disposing the property to another party, these landlords eliminate the headaches of troublesome tenants, clogged toilets, and malfunctioning air conditioners. They simultaneously earn interest on their seller financed loans which will bring them significantly higher returns than a bank savings account or certificate of deposit.
The beauty of owner or seller financing is the flexibility to work with any home buyer a seller can come to agreement with. If a traditional bank won\’t consider your application, explore the alternative of OWC financing. In fact, you may choose to circumvent regular financing and try OWC financing as your first alternative. Many real estate investors and home buyers depend exclusively on this financing option without fretting about qualifying with a traditional bank loan.
Looking to find the best deal on Burbank homes for sale? Come and see what Burbank Realtors can do to help you find your dream home.
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