Home Buying in Oklahoma City>Question Details

lbrown915, Home Buyer in Oklahoma City, OK

I recently saw a home where the owner is offering financing. Our credit is to low to go traditional financing. Is there anything I should beware of?

Asked by lbrown915, Oklahoma City, OK Sat Jan 26, 2013

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The way you wording that; makes me think that you are going to try to do this yourself, true?
If that is true, I can only say, Good Luck.
1 vote Thank Flag Link Sat Jan 26, 2013
I do have 10 years real estate experience from two other states.. Typically I recently divorced have some cash enough for owners downpayment. I tried to rent apartment but due to credit and eviction I cant find housing.. Living with friend, This is like the lesser of the two evils...
Flag Sun Jan 27, 2013
You should take the contract to an attorney to make sure its legit. Better safe than sorry.
0 votes Thank Flag Link Tue Jan 29, 2013
Good advice offered already but I would ask why you want to go this route in the first place given that you are probably looking at a hefty down payment and high interest rate.

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!

Michelle Foy
Verbode LLC
405-365-5320
michelle@buygreenokc.com
0 votes Thank Flag Link Sun Jan 27, 2013
Absolutely! I agree with Karen Anderson. There is a lot for you to be aware of and hiring a professional Realtor will protect you all the way around.

Good luck to you!

Karen Barton
Metro First Realty
405-209-8243
0 votes Thank Flag Link Sun Jan 27, 2013
Thanks
Flag Sun Jan 27, 2013
There is plenty for you to beware of lbrown, including everything mentioned in all the other posts. I would highly suggest seeking a Realtor you trust to help you out with this process. Please don't take any chances with this one.

Best of Luck,
Karen Anderson
Real Estate Consultant
http://www.karensrealestate.net
0 votes Thank Flag Link Sat Jan 26, 2013
Yes, and just by asking the question, you have proven that this is probably not the best option. Things that can go wrong:
- 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.
0 votes Thank Flag Link Sat Jan 26, 2013
Lbrown,
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.
0 votes Thank Flag Link Sat Jan 26, 2013
Have a professional realtor help you. Be sure to close through a title company.
0 votes Thank Flag Link Sat Jan 26, 2013
Typically, higher interest rates. Still do inspections. You can still have a buyer's agent to help you through the process.

Karen Moseley, Realtor
Coldwell Banker
40-650-3548
0 votes Thank Flag Link Sat Jan 26, 2013
Some Protective Measures:
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
Web Reference: http://www.GetSoldOKC.com
0 votes Thank Flag Link Sat Jan 26, 2013
Thanks Josh good info how do I check the county records and lis pendens ...I was an agent for 10 years in NJ been away from it for over 6 years very rusty.. i am thinking about going back to school for OKC license...
Flag Sun Jan 27, 2013
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