how to purchase a house w/bad credit a very little down

Comments(3)

• 
  nyreinvestor12th June, 2003

  a friend of mine was in the same situation he was buying a 2 family valued at 365000, he knew the seller very well so the seller cut in a huge break the house was paid off had loads of equity in the house. the owner and him worked up sum agreement between my friend and his lawyer, the owner had put my friend on the deed as well, i beleive sum type of trust and did a refi on the house, so when it went through the owner just kept the money (they worked out the taxes) the owner also took and note on the house for like 25k.
  the selling price was like 325 or 335 k .
  i hope this helps dont qoute me on this hopefully it will help to do something creative i just wanted to help

• 
  Dural12th June, 2003

  If I were you, I would throw out some "what if" situations to the seller. For example, "What if I could pay you $5000 down. Would you finance the rest at 8% interest, and I will refinance and pay off the balance within two years?" If the answer is no, throw out another question. Also, show the seller some kind of proof that you can make the payments, such as pay stubs.
  
  This is how my father and I sell to people with a bad credit. Rarely ever have problems.
  [addsig]

• 
  loanwizard12th June, 2003

  Quote:
  On 2003-06-12 18:28, lizmom wrote:
  I am in the process of repairing my credit I have a homeowner who is willing to sell me his 2 family home valued at $145.000. He wants $120.000. I don't have a large downpayment and as I stated my credit is in bad shape. The home owner is willing to do some kind of creative financing in order for the deal to go through but we aren't sure what to do. If I was to acquire financing for the property, affordability is not a problem. Can anyone help me figure out what to do <IMG SRC="images/forum/smilies/icon_confused.gif">
  
  
  
  I don't have any way of knowing if this is a good deal or not because of the lack of numbers, but as far as the financing part of it, if your seller is truly open to creativeness, this is pretty simple and straight forward. There are 3 tools that I know of that will let you in the door. The first is a straight land contract/ CFD. If the owner will go for it with your limited (you don't say how much) downpayment, this affords you the buyer with the 2nd greatest security of the 3 methods as long as you record it. You write it up as 30 year or whatever term you and the seller desire, with a balloon due upon a pre negotiated period (most common is 2,3 or 5 years) whatever it takes to clean up your credit enough to refi.
  
  The 2nd method is to take over the sellers mortgage subject to the existing loan. This gets you the deed, however the liability is on the seller.
  
  The 3rd and safest for the seller, is a lease option. although it can work beautifully for equity build up. For,instance if you were to buy the property with any of the other methods, in 2 years if you financed 120k you may owe about 118k. However you could offer the seller 125 k with $350.00 a month credited toward the purchase then your bal at the end of 2 years is only 116,600 instead of 118. These are not exact figures, just an example.
  
  I woory when I see a newbie saying that a seller told them that FMV is xxxx but they'll sell for a lot less. Generally speaking that is against human nature. They may be motivated but you must be able to spot real motivation vs. fox in the henhouse motivation.
  
  Good Luck,
  Shawn(OH)