Financing a home is one of the most critical factors for buyers looking to purchase real estate. In fact, for the individuals with bad credit, financing can be a big issue. However, bad credit does not have to prevent you from purchasing real estate.
#1 – Seller or Owner Financing
In 2017, there were 89,779 owner financed notes which totaled $17.3 billion dollars according to Note Investor. Seller financing is a loan that is provided from the current homeowner who is selling their property to the buyer. It eliminates the need to obtain financing through a lending institution.
Homeowners who have a difficult time selling their home are most likely to provide seller financing. They would then offer to sell the home to buyer, and have the buyer sign a promissory note. This note includes a few essential terms such as what will happen in case of a default, the applicable interest rate, and the repayment schedule of the loan.
#2 – Lease Option
A lease option is where the buyer pays the seller money in order to have the right to purchase the property at a later date. The amount payable can be as little as $1.
The parties can agree on a price at the time of the lease option agreement…