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What are my chances of Home Ownership with Bad Credit?

I would love to own a home, but my credit is very poor.  What are my chances of obtaining a mortgage?  If I can't get a mortgage, is lease with option to buy a good way to go while I work on fixing my credit?  
  • June 03 2014 - Pompano Beach
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Answers (8)

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  • June 14 2014
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Not good to be honest.  If you try a rent to own, please hire an attorney as many investors target individual with bad credit in rent to own scams.
  • June 09 2014
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I would have to know how bad the credit is and how it came to be there.
sometimes people think their credit is really bad and it just needs so adjustments with some letters of explanations. I you would like more help just let us know the particulars.
Thanks for your question.
  • June 03 2014
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It depends on your actual situation.  How bad is the credit? Have you spoken to at least one lender to discuss all options?  Yes there are sellers that do seller financing/lease with option to buy.  I have a situation where my buyer has a low credit due to being overseas for 10 years and is now ready to buy their home.  I expanded my buyers options and found a seller who was offering owner financing.  This is not for everyone or every situation as it does favor the seller. 

Let me know if you need a lender or Realtor for your area.  Contact me via my profile. 
  • June 03 2014
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Define bad credit... foreclosure, bankrupcty or just a bunch of collections and charge offs? There are ways to get your credit up to snuff without shelling out a bunch of money. Call me and lets get you figured out.
  • June 03 2014
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Profile picture for USMortgageRanger
Your chances of getting a mortgage is good if you can stick to a set regiment to repair your credit over the next few months. I would stay away from rent to own as sellers can default on the initial loan and you are left with no home. I can be reach via my profile for a free no obligation consultation. 
  • June 03 2014
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Profile picture for San Diego Asset
Unfortunately, you're likely going to have to rent for awhile, while you work on rehabilitating your credit.  Loans are readily available, and interest rates still very low, for qualified buyers, but lender underwriting is stricter than ever, and your FICO score is a critical determinant.  

You could try lease with option to buy, if you can find a situation where an owner/ landlord is willing to offer that.  May be a good option for you.  Also, focus on saving your down payment now, so you're ready down the road, when your credit is better.  

Good luck!
  • June 03 2014
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Profile picture for sunnyview
How poor is your credit? Do you know what is pulling down your score? If you have bad credit, it is almost always better to target specific areas for improvement before you buy to reduce your overall costs of a mortgage and to give yourself more choices of property.

Bad credit is not permanent. I would recommend taking a look at the MyFICO forums and website for information on fixing your credit. You can get specific information to raise your credit by addressing target areas, lowering your credit utilization rates, dealing with overdue accounts etc. You can buy, but buying is cheaper and easier with a credit score that allows you to qualify for an FHA loan or a conventional mortgage.
  • June 03 2014
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