Home Buying With Bad Credit Mortgage?

Q: My husband and I are starting to look at buying a home. However, our credit is very bad. It is improving, what with paying off the Visas (less than 10k to go!) the cars (one paid for!) and getting a start on the student loans. Is there any way to get a mortgage with absolutely lousy credit? Short of going to Shylock's Usurer and Meat market?

A: Yes, there is, although you shouldn't expect a bottom-dollar interest rate if you have a bad credit history. Read up on land contracts. I'm holding two of them at the moment so I speak from experience (as a seller, that is). I won't try to go into all the details here, but under this arrangement when the owner of the property sells it to the buyer s/he provides the buyer with financing just like a conventional mortgage (i.e., the buyer makes a down payment and monthly payments to the seller) but the seller retains the right to take the property back (without paying anything whatsoever back to the buyer) should the buyer default. These arrangements are usually thought to be more advantageous to the seller than to the buyer because of the strict repossession provision, but if you as a buyer know you will make your payments then they can be not only a good way to make your first purchase of real property but also a means to improve your credit rating in the process.

Home Buying With Bad Credit Mortgage?

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