What is the cause of your low credit score? is it a lack of credit? High credit card utilization? Outstanding collections?
Secondly, what does your debt to income ratio look like and do you meet income restrictions to utilize the current OHFA bond program for down payment assistance?
There are a lot of variables and possible scenarios here. If you have saved money for a down payment and you are able to utilize the bond program AND either collections or high credit card utilization is your issue, I would suggest paying your cards down and paying any outstanding debt off with your down payment money saved, waiting a couple of months until your score jumps back up and then utilizing the bond money and seller paid closing costs to get in to a house.
The bond program does require a minimum FICO score of 640 but it is an excellent opportunity for first time buyers (those who have not owned in the last three years) to get their 3.5% FHA down payment paid.
I would be happy to discuss further if you would like to give me a ring or shoot me an email.
Best of luck!
Best of Luck,
Real Estate Consultant
- house isn't worth the price (would it appraise)
- interest rate
- terms of the deal (what happens if you make a late payment/need to move)
- would it pass inspection
- does it have clear title.
Oh, that's not the whole list.... just the start. Please get a good lawyer involved to advise you if you pursue this. Yes, they cost money, but making a bad deal on a house could cost you far, far more.
Yes, more than we can include here. Seller financing is offered because it favors the seller. There is nothing inherently wrong with that, if it's your only choice and you like the house. A seller who would provide this to someone with poor credit has to tip the balance in their favor so far that they could deal with many issues that could go wrong and still be okay. The cost/benefit to the buyer, you has to be good enough that you bypass all of the more traditional options available to you.
If you have credit issues that prevent you from qualifying for traditional financing, why don't you resolve those first. Owning a home, being prepared for roof leaks, broken appliances and any number of issues that come up is not for everyone, especially if you don't have financial reserves. Our recent housing bubble was created when financing was too easy and people got in over their heads.
I don't know you and you could be the exception but chances are you are better off resolving your credit issues before you try and buy.
1. Check county records to ensure the person offering the owner finance is the owner of record.
2. Check the County's "Lis Pendens" notices to ensure that the owner is not under water.
3. Make sure you have a solid contract that spells out what amount of payments go to what.
You should always seek the help of a professional, i.e. an Attorney or Realtor.
Best of Luck,
Josh Barnett, Realtor
Metro First Realty