Home Buying in Philadelphia>Question Details

Michael Movi…, Renter in Philadelphia, PA

Is seller financing an option for a single family home buyer with poor credit?

Asked by Michael Movius, Philadelphia, PA Thu Jun 30, 2011

After some hard times, I've defaulted on my student loans. I have steady, half-decent income but dont have time to fix credit. Is seller financing an option for me?

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15
You received many answers. Seller financing will depend TOTALY on 2 items. Credit & down payment.
0 votes Thank Flag Link Fri Jul 1, 2011
hi Michael,
You have a wide range of advice, and I agree with most posts....seller financing is first and foremost hard to find, and even if it is found, the buyer typically falls out of the transaction at some point, and the home reverts to the original owner.
You mention you do not "have time to fix (your) credit." I am not sure that is true. Most good lenders will be able to assess your credit quickly, and most have the ability to use "rapid rescore" that can get new scores in less that 72 hours. Tackle that credit now! Besides, many times sellers check your credit too...
We at American Bank do not charge for credit repair services either! We have many times improved scores enough to get the deal CLOSED!
Best wishes whatever you should decide....Jim, American Bank, 703 615 4675.
0 votes Thank Flag Link Fri Jul 1, 2011
properites with seller financing available are less than 1% of all sales...you are now looking for 5% of 1%...so is it possible...yes, but i think you'd be better off repairing your credit.
0 votes Thank Flag Link Thu Jun 30, 2011
no. Try to rent until credit is improved, then consider to see if you can qualify for mortgage financing at a later date.
0 votes Thank Flag Link Thu Jun 30, 2011
Yes, but it's complicated and the situations in which this would work are endless and varied. The first step is to sit down with a Realtor, go over your credit in depth so that they can properly negotiate on your behalf, and pull up a list of properties in which seller financing is available. Did you know we can do that?

As a buyer, you pay nothing. Good luck to you!
Web Reference: http://famouseric.com
0 votes Thank Flag Link Thu Jun 30, 2011
My credit is only poor due to my student loans. If I dont pay my mortgage/rent, i'm out a place to live so theres more urgency.

I dont mean just fsbo, seller financing in general. They would gain money with intrest and if I defaulted, they keep all
0 votes Thank Flag Link Thu Jun 30, 2011
hi mike,
I am a real estate agent, please feel to use me as a resource. I work with clients with less than perfect credit because i was a person looking to purchase a home with bad credit. I learned a lot during my pursuit of buying a home. So I share my information with my clients. 215-531-0481.
good luck
0 votes Thank Flag Link Thu Jun 30, 2011
Jeanne, FSBO sellers are not always not advised. Hopefully a knowledgable FSBO (and one more likely to be successful) would not do this. Any person with common financial sense would not touch this situation. Doesn't matter if they are seller advised or not. Just another anti-FSBO bias!
0 votes Thank Flag Link Thu Jun 30, 2011
Just being honest - if you have poor credit and can't pay your bills, why would any seller put their credit on the line to finance you? They would be VERY foolish to do so to you or anyone else in your financial situation.
0 votes Thank Flag Link Thu Jun 30, 2011
Hi, It really depends on the seller you are dealing with. Lending money is all based on risk and with poor credit you are considered a high risk. There are credit repair companies that can help you fix your credit but be careful who you work with. Seller financing is usually good afor a few years and then you refinance into a bank loan so you might be able to make it happen.

Chris
0 votes Thank Flag Link Thu Jun 30, 2011
Hello Michael.

If you don't have time to fix your credit, pay for someone to do it for you.

Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
0 votes Thank Flag Link Thu Jun 30, 2011
Hi, Michael.

To answer your question, it will truly depend on the seller you are working with.

On the one hand, the seller knows that a bank won't lend you money so if he/she wants to sell their home to you they may have to extend this option. On the other hand, the seller now knows why the bank won't lend you money and may want to follow their logic.

Your best bet if you really want a house, is to let the seller know that you will pay a substantially higher interest rate than the going market to help mitigate the risk. If you need anything else, please let me know.

Good luck!

Tim

Timothy Garrity | Realtor & Consultant
215-829-8850 Office
267-879-2716 Mobile
tim@usspaces.com
http://www.phillyurbanliving.com
0 votes Thank Flag Link Thu Jun 30, 2011
Prior poster is right. The answer will come from the lender, and that will be the seller. Perhaps you'll have more luck with a FSBO that is not being advised by an agent, for as the prior poster points out, a seller, well advised - will likely be hesitant.

Suggest you consider renting and taking the time to repair your credit.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Thu Jun 30, 2011
It's an option, but think things through and ask yourself why would a Seller be inclined to extend you credit if you have a poor credit rating? Would you extend credit to someone with a bad credit rating? The truth is you do have the time to fix it, you simply haven't made any real effort. You need to focus and get your creidt fixed it will affect you the rest of your life. It's going to take a year or ddepending on your situation perhaps a couple of years, but until you address this problem you're going to be unable to do certain things and will be charged more than average by anyone who does give you credit.
0 votes Thank Flag Link Thu Jun 30, 2011
It is an option if you find a seller offering owner financing that is willing to lend to you. However, prudent sellers will most likely check your credit. They may be more flexible than a bank, but you may have to pay a higher interest rate.
0 votes Thank Flag Link Thu Jun 30, 2011
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