Home Buying in Indianapolis>Question Details

Joseph, Other/Just Looking in Indianapolis, IN

Im a renter looking to buy a home,my credit isnt good enough for a loan.even though all there is is about 2500 dollars in doctor bills and thats it,

Asked by Joseph, Indianapolis, IN Mon Mar 8, 2010

I have a good friend in real estate that says i could do a contract home.Is that worth it

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Is the house already paid off? If not you could easily make your payments only to find out that the owner did not make mortgage payments and now you are out of luck and house.
0 votes Thank Flag Link Wed Mar 24, 2010
Often, when taking advantage of a lease/purchase opportunity, you lock in the sales price today and have the option period (often 2+ years) to obtain financing. During the time you are renting under the agreement the seller will often be crediting part of your monthly rent towards your down payment.

So, while you are working on raising your credit score you are also taking advantage of today's awesome home prices and putting some money awa, via your rent, towards the down payment.

Consult a Realtor who is experienced in creative financing and he/she will be a valuable asset to you. Good Luck Joseph!
0 votes Thank Flag Link Wed Mar 24, 2010
Why not work on creating a good credit score now? You can always buy a house later on. You would lose out on the $8k credit, but the market is not going to boom over the next couple of years.
0 votes Thank Flag Link Wed Mar 24, 2010
Good morning, Joseph!

I am at a professional credit restoration company and deal with situations similar to yours every day. I would need to review your credit report to provide you with an accurate time frame, however, based upon the information you provided, it looks like you could be ready to go within 90 days.

Depending upon how quickly you need to move and the funds you have available, I think the Realtors who have answered your question have provided you with some fantastic solutions, such as a lease/purchase option. I have found that many sellers will allow you to work on your credit while in the property allowing you time to qualify for financing before the end of the option period.

Hope this helps!
0 votes Thank Flag Link Wed Mar 24, 2010
Joseph,

2500 in medical bills alone will not preclude you from obtaining mortgage loan financing. You should give me a call as I would be more than happy to go through your credit report line by line and formulate a plan to get you on the path to homeownership. I am a retail mortgage loan officer working for a regional bank here in Indianapolis.

Tim (317) 835-5379
0 votes Thank Flag Link Wed Mar 10, 2010
Joseph,
I suggest working with a lender to see why your score is too low for a loan. Medical bills alone won't lower your score. There are several ways to improve your credit, you just need to review your whole report and see what steps need to be taken. Depending on what your credit looks like will determine how long it will take to improve it.
Joanna Sharp
Mortgage Consultant-MetLife
0 votes Thank Flag Link Wed Mar 10, 2010
Joseph,
The best advice I have on buying a home on contract is.. Beware! Most sellers can't sell their homes on contract because there is already a mortgage in place on the home. Mortgages carry a due on sale clause. This means that if the home is sold the bank can call the mortgage due. The real problem is that many sellers will sell their home on contract anyway. You as the buyer go on making your payments to the seller and lo and behold they stop paying the bank and the home goes into foreclosure and you loss any deposit you made. If there is no mortage on the home and the seller is willing to sell to you on contract, be aware that you will probably be paying at least market value for the home if not more. Be cautious about overpaying. Make sure the contract is recorded and that the seller has clear title to the home. Hire an agent to represent you. It will be worth it. You might be better off to try to settle your debts and clean up your credit so you can purchase a home. This way you can get the best terms and price possible. Contact me if you need any help. Terry Melvin, CRS, GRI REMAX Advantage http://www.DreamsToHomes.com
0 votes Thank Flag Link Mon Mar 8, 2010
Joseph,
If you go with a contract home, the seller will usually want a substantial down payment ($5000k or so) plus you're going to pay a high interest rate. However, as long as your contract is recorded, I believe you should qualify to get the $8000 first time homebuyer tax credit.
Do you know what your credit score is? Have you spoken with a lender yet?
Regards,
Mary

Mary Petruzzi, Realtor
Century 21 Scheetz
mpetruzzi@c21scheetz.com
0 votes Thank Flag Link Mon Mar 8, 2010
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