I’ve got BAD credit, but want to buy!
Question: Unfortunately I had a charge off a year ago, and have a VERY bad credit rating….All my bills are now in order, and I’ve done my homework on a property that’s $89,900 and monthly rent of $1300(duplex)…….I have $15,000 to put down, and after a 7 1/2% mortgage AND taxes, I’ll have $450-$500 POSS. cash flow……….Does anyone know how I can get a mortgage?……I also have $102,000 equity in my primary residence……and NEVER a late payment on mortgage…..can someone help w/ ANY info…..Thanks in advance…..CJ
Answer: When you have bad credit, don’t expect market rates of 7-7.5%; however, there are options. Try owner carry contracts, 2nd deeds of trust, or wraps.
I have even been able to get homes built with second deeds of trust! Work with knowledgeable and reputable lenders and Realtors and you will be surprised at how many options there are. With the equity in your own home, you might be able to borrow against it and then have enough down that a bank or mortgage company will have almost no risk lending you 60-70% of the purchase price! In answer to your questions,
To be able to buy now and finance (and make the down payment ) later, consider this (and we can do it all for you, if you wish):
Have the seller agree to let you take over his current loan payment for, say, two years (we provide a safe, legal and most effective way to this without violating the lender’s Due-on-Sale Clause, and jeopardizing the title).
You agree with him/her that you will put you own loan on the property at the end of that period, and pay him then all of his beginning equity (whatever equity he may have had at start following your $15,000 contribution). As a further incentive, you might even offer him a portion of the appreciation that would accrue over that 2 years, if you felt like it).
Then follow these steps: 1) place the property in a title-holding land trust in his own name (we can do that for you, or you can find an attorney on your own), 2) You become a co-beneficiary in the trust, and 3) you lease the property from the trust on a ‘triple-net’ basis [IRC# 163(h)(4)(D) then gives you all the same benefits of ownership that any owner of real estate could ever have.
By this procedure, you end up with 100% (ALL) of the benefits of ownership, including use, occupancy, equity build-up, appreciation, full tax write (for the existing mortgage loan), saleability, transferability, quiet enjoyment, etc. (ALL THE RIGHTS WITHIN THE BUNDLE OF RIGHT IN FEEE SIMPLE OR FEE DEFEASIBLE REAL ESTATE OWNERSHIP). There is no due-on-sale violation; there is no chance that either party’s (buyer or seller) lines, suits, judgements, BK’s or other legal action could ever affect the property’s title.
Before you do any of this buy the book, “NO NEW LOAN!” by Bill J. Gatten (It’s good– I wrote it m’self) $16.95+tax and shipping
It’s a Best Seller (for me, anyway… it’s the only one I’m selling)
Related Posts
Filed under: Bad Credit
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.