Home Buying in Walton>Question Details

Gturnpaugh, Home Buyer in Walton, IN

I cannot get a loan to buy a house due to a low credit score, can I still buy a house on contract?

Asked by Gturnpaugh, Walton, IN Sun Feb 7, 2010

My score is about 30 points below where the bank wants me to be for the loan, and will not work with me to do an inhouse loan because of late payments that were a year ago. Can I possibly buy on contract? and if so, what do I need to do? Help!

Help the community by answering this question:


If you have a large downpayment you might find someone who will sell on contract to you. Most sellers I've dealt with who sell on contract want at least 10% down. So if you are looking at a $100,000 home, that would be $10,000 down, a $50,000 home would be $5,000 down.

Keep in mind the seller is taking the place of the bank. He is basically loaning you the money to buy the house. He wants some assurance that you will make your payments as promised and one way to do that is a large downpayment. Another way is to charge higher than market interest.

It is always better to get a loan from a lender - lower downpayment, lower interest, lower payments, etc. Besides that, your choices of homes will be very limited. You have to find a seller willing to sell on contract. That eliminates foreclosures and almost all houses that have a loan on them.

Your best bet for now would be to work on your credit. Besides making all your payments on time, find out from the bank that turned you down what else you can do to bring your score up. Once you get your credit up, then you will be in a position to find the house you want, not just settle for a house because the owner will do a contract sale.

Good luck!
Web Reference: http://www.liveinkokomo.com
2 votes Thank Flag Link Mon Feb 8, 2010
i want to buy a manufactured home. i filled bankruptcy over a year ago, my credit scores are low. i'm tried of paying high rent. can you help me?

thank you
marsha grams
0 votes Thank Flag Link Fri Jul 29, 2011
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