Important Aspects to Consider Preparing To Buy A Home
There are many decisions involved in buying a home. The decision to buy will be one of the most important life choices you will make. Obviously, you only want to move forward after careful thought and consideration. But how do you actually close the deal and move forward with a purchase if you have so-so or even poor credit? Do not make the decision to buy without first consulting trusted industry professionals. This could be a real estate lawyer, mortgage broker or even a Scranton-based real estate agent.
Thankfully, there are some logical decisions along with a multitude of options to consider which can push you over the finish line and secure a mortgage on your dream home. Our business speaks to people with no credit, bad credit, etc. all the time. Below, you’ll find tips and suggestions to ponder as you try to strengthen your credit score in preparation to buy a home.
Buy A Home in Scranton Using Seller Financing
Anyone can buy a home with bad credit, or even no credit at all. The secret is knowing where to find the sellers who want to sell. In Scranton PA market, there’s an aging population demographic of investors and homeowners that are open to selling their properties – yes even to you with terrible credit. Anyone can buy a house without a bank by a process called “Seller Financing”. By this method, the seller of the property writes up a contract and acts as the “bank” and will take payments from the buyer over a period of time. Why would a seller wish to do this? Because the interest rate they charge is typically higher than a bank, so they get a higher rate of return back from higher interest and it also benefits them on their taxes. They don’t have to declare the entire purchase price all at once, rather they spread it out over time.
As mentioned earlier, if a borrower has terrible credit or no credit, if they can find a home owner in Scranton looking to sell a property that is not listed with a real estate agent, and owns that property free and clear, then the seller can finance up to 100% of the purchase price to the borrower, thus eliminating a bank from the equation completely. You might make a few concessions on the interest rate or somewhere else, but hey, if you can acquire a home, it’s worth your time and seller financing is definitely something to pursue.
If you are interested in learning more, we highly recommend reading: How to Buy and Sell Real Estate Without Using a Bank Michael P. Watson. This book opens up a world of possibilities you’ve never realized existed. It’s a fantastic read and absolutely worth your time.
Prepare For Buying That Dream Home
A co-signer will be helpful to get the borrower pre-approved and over the finish line, but the co-signer needs to have a high credit score, usually 700 or above. A borrower can sell off liabilities like financed vehicles or other items that are cutting into their monthly debt to income ratio. Consider selling off financed liabilities, pay down credit cards, and settle anything outstanding on your credit report.
We once met a man that had to sell his new truck in preparation to buy a house. Once he sold his truck the bank provided him a letter and he purchased a home soon afterwards. In other words, sell of anything that is costing you a monthly payment. This could be anything from a home gym, to timeshares, to you name it. Not only will it look better on paper, but lenders will quickly take notice. When this happens, your odds of landing a mortgage drastically increase.
Build A Better Credit Score Beforehand
When is the last time you saw your credit report? Another good rule of thumb is to dispute anything on your credit report that may not be correct. These are some tips to increase your score fast.
How long have you been employed your job? Lenders will take the time of employment into consideration, especially for borderline clients with low credit scores. If a lender discovers you have been steadily employed for maybe 5-10 years, they can see you are are a hard-working responsible individual that doesn’t jump from job to job. There’s some fantastic local mortgage brokers that service Scranton and surrounding areas, such as Jesse Getz. Whoever you choose, you might want to consider setting up a consultation to get to know them better and build a relationship.
Beef Up Your Bank Account
Finally, the finances you have in the bank play a pivotal role when looking for a home. If a lender sees you have some money in the bank, you appear more responsible and also appear to have learned from past financial mistakes. Even if it’s a small figure, perhaps only $5,000 it can look very good on paper. Even that small amount of cash can help you land an FHA loan. These considerations are small, yet subtle things to consider beforehand.
We Buy Houses In Pennsylvania Help Scranton Home Buyers
We Buy Houses In Pennsylvania can help you buy a house without without a bank, because we occasionally seller finance homes that we have purchased. We also have clients that specialize in selling homes to first time home buyers. Our process is quick, fair, easy and stress-free. We are honest, professional and reliable. We Buy Houses In Pennsylvania, we never pressure you and we have an solid reputation.
Give us a call and let us talk with you about the options. Contact us today.