If you notice one thing about real estate investors, it is they never put their money where they would lose. Most of them are wary of the market prices and are expert enough in buying houses way cheaper than the quoted price.
There are certain strategies for buying houses with bad credit and they could either be easy or hard. It depends on the house and the area where the customer wants to purchase a property. The main formula is to keep focusing on one particular plan or idea and be committed to it.
It may sound stupid and obvious, but you have to advertise first. You need to let people know that you are looking for a house for a certain price and also looking for seller financing. You can also specify that the contract shouldn’t be written based upon your bad credit.
Some financiers don’t ask for past credit record. It is also always better to approach the owner of the house instead of a real estate agent. They wouldn’t like the idea of you wanting to buy a house with bad credit, which means paying as low as possible and this in turn would hardly pay any commission as they live in them. So, it is always better to approach the landlord.
The best thing to do when you want to own a house is by improving your credit report. If you have a better credit, you will be entitled to pay a lower interest rate for your loans. This will save you a lot of money over the long-term payback.
If you still want to insist on buying house on bad credit, then you can search for the seller financing or a bank which would be willing to sanction a high risk loan. But this would only mean you will have to pay higher interest rates and fees.
There are some sellers who lease their house as a “rent to own homes” option. One portion of the money paid for the lease is counted as a down payment for the house. There is an advantage of approaching for seller financing instead of approaching a bank. The best part is you pay lower interest rates compared with banks and also there is no lending fee charged for this.
Sometimes you can even ask the landlord to carry the loan by offering to purchase for full price and take a low down payment. This way, the small down payments which come from the rent can be credited to the landlord.