If you do not have any credit, buying a house can be a challenging event. It is also difficult to finance a house with poor credit. When you want to buy a house but cannot get financing, you could purchase one through a different method — buying with a land contract. If you are interested in this option, continue reading to learn what it entails.
Hire a Real Estate Agent
Finding homes for sale through land contracts is not always a simple task. If you want to find these types of houses, talk to a real estate agent. Agents know about all the properties for sale in the area where they work, and they might know about some land contract deals. If there are not any at this time, they will find them as they come up. Your agent can help you find these homes, but that is not all. Your agent will also help you negotiate through the deal.
Understand the Basics of Land Contracts
A land contract is a deal between a person selling a house and a person buying it. The seller agrees to keep the mortgage on the property, while the buyer gets to move into the home and make mortgage payments to the seller. The buyer provides a down payment to the seller before moving in, and all the payments they make lower the principal balance of the house purchase. After five to ten years, the buyer gets a traditional loan from the bank and purchases the home outright.
Weigh the Pros and Cons
Does this sound like a great idea so far? For many people with bad or no credit, this is the best way to buy a house. Before you go through with it, talk to a real estate agent about the pros and cons. You should weigh them before buying a house through a land contract.
The primary benefit is that you can buy a house without a credit check. Your credit does not affect your eligibility. The main drawback is that you might pay a higher interest rate to the seller. The seller has to keep the mortgage, which presents risks to them so they might charge a higher interest rate to lower the risks.
As you begin thinking about buying a house, talk to a real estate agent to learn your options. Agents can help you find the right home to buy. They can also help you choose the best method to use for purchasing the property. Call an agent today to learn more.Share