Make the Best Deal for Any Combination of Down Payment and Credit Score
For someone trying to buy a home with owner financing, a lease option or through a traditional bank loan, the two key elements that have a big impact on a successful purchase. Those two elements are the buyer's down payment and credit score. In either case, bigger is better.
A large down payment amount, say 20 to 30% of the home's price or value, and an excellent or above credit score go a long way in helping a home buyer to obtain the best financing options available. Unfortunately, many people who deserve a home of their own have either limited down payment funds available, or good (or below) credit score, or maybe both a low down payment and a low score.
These situations should not force buyers to pass up getting into their dream home. Owner financed homes can help fulfill the dream since owner financiers can offer more flexible lending terms than banks.
Fortunately, there are some strategies to use to help buyers overcome difficulties with down payments and credit scores. Owner financed homes buyers can benefit by considering how the home seller might evaluate their lending risk, and buyers can then prepare a purchase agreement that is fair for everyone involved.
Small Down, Good Credit
For instance, if a buyer has a small down payment but good or above credit score, the buyer can leverage their healthy credit score by asking the owner financed home seller for a lower interest rate. Sellers will want to see a larger down payment as a way to reduce their risk on non-payment on their home loan. If down payment funds are limited, the seller will balance their risk by charging a higher interest rate to the buyer.
Buyers who lack large down payment funds, but have good credit history, should not be shy to point our their lower risk for non-payment and then ask for a lower interest rate. Their good credit history should re-assure sellers of their lower default risk.
Good Down, Poor Credit
On the other hand, a buyer may be fortunate enough to have built up savings for a down payment, but not have the best credit score. In this situation, the buyer can also strike a balance for a better deal on an owner financed home. Again, the buyer just needs to consider how the seller wants to minimize his risk of lending and then use it to his own advantage. Specifically, having a down payment displays the buyer's ability to manage money and preserve cash. The poor credit score may reflect a previous poor purchase decision or over extension of credit lines.
If the buyer has learned from this and has made efforts to improve their credit score, such as closing certain credit accounts or setting up plans to pay off outstanding debts, the owner financing home seller should be made aware of this. Using the credit management links on getrenttoown.com complaints about one's credit can be located and addressed, which should raise one's FICO scores. Demonstrating an improved credit attitude, plus presenting earnest money in the down payment can eleviate risk concerns the seller might have for a buyer with below average credit scores.
As one starts doing home searches on getrenttoown.com complaints about one's credit should be also handled, to ensure good credit-worthiness.
Other strategies can be used for various combinations of a buyer's down payment and credit score standing. When members search listings of owner financed homes for sale on www.GetRentToOwn.com, they will see a customized, owner-financed wizard appear on the listing's details page.
A quick and easy 4 step process lays out the strategy depending on the buyer's unique situation. Additional tools for negotiation, evaluation and record keeping are all included in the wizard, and can be used unlimited as long as the buyer maintains membership with www.GetRentToOwn.com. This is just one of the many benefits that GetRentToOwn.com members enjoy every day.