My husband and I are looking for a land contract or lease with option to buy, with little to no money down. We both have credit issues

Asked by Guyburger, 49456 Sat Sep 25, 2010

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James Gordon…, Agent, Hamilton, OH
Sun Sep 26, 2010
Guy most people when they sell on land contract want a decent down payment and a conditional preapproval from a local lender. 10% down on a land contract with a 2 or 3 year balloon is not uncommon. You would need to be able to obtain traditional financing when the balloon is due or risk losing what you have in the transaction already. In Ohio most sellers will not take 20% down if they have talked to an attorney because at that point in Ohio it becomes a forclosure instead of an eviction. Forclosures take longer and cost a lot more. This is not legal advice but what I have run into. Please make sure you get an attorney involved on your side before you sign the final papers on a land contact. There have been at least 50 land contracts in the county I live in that went bad not because of the buyer but because the seller got forclosed on.
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Celia Butler, Mortgage Broker Or Lender, Gilbert, AZ
Sat Sep 25, 2010
Hi there ...
No one seems to be jumping in to help you.
Let me be the first.
I find that land contracts are extremely difficult to finance. Most lenders want about 50% down and pretty good credit. You have to understand that it is just not that good of a collateral.
Re: Lease with option to buy also want money up front (most not all) HOWEVER you might try a few things. If you could find a house you like that is listed for rent you could call and ask them if they would consider leasing it with an option to purchase. Just ask. Most of the terms of a lease w/ option are negotiable but make sure to get it in writing. They really might work with you if you tell them exactly how you intend to proceed with the purchase, your time frame etc. If you do this make sure you document all payments you make and if it were me I would say the purchase price (when you decide to do the purchase) is dependent on the appraised value of the property at the time.
Also IF they want a credit report on you be prepared to explain your credit issues and make sure that all of your rent payments for the past year+ have been on time ~ it could be an issue.
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