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HOME PURCHASE,
Renting a home for two years, the owner decided to sell to me via notice to vacate. I have bad credit, owe taxes and zero for a down payment. What are my options in Michigan.
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1 Reply
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Suppose you are in Michigan and need a better credit history, tax obligations, and no deposit to provide. In that case, the following strategies may serve you:
Improving Your Credit
Get Your Credit Fixed: Try to enhance your credit score before applying for a mortgage. This may include paying off bills and debts, paying up other bills, and removing errors from the credit report.
Engage with a Credit Counselor: A credit advisor can provide constructive recommendations to improve your credit history.
Seek Down Payment Assistance Programs.
Programs on Local and State Level: Some programs in Michigan provide down payment assistance for first-time borrowers. You can apply for grants under the Michigan State Housing Development Authority (MSHDA) that may assist you financially.
Grants for Percentage Deposits: This grant has been designed for low-income and first-time mortgage seekers.
Use FHA Loans
Credit Score Expectations: Low Credit scores are fine for borrowers applying for An FHA loan. For a 3.5 percent down payment, borrowers must have a minimum credit score 580, whereas 500 is needed for a 10 percent down payment.
Alternatives for Down Payment Assessment: Also, down payments can be made through financial gifts or by utilizing the assistance of family members.
Seller Financing
Negotiation: If the seller in question agrees to sell directly to you, consider this option. She is prepared to finance herself, which means she may let you pay part of the purchase price to her at some later date, possibly with easier terms than those offered by financial institutions.
Lease Option
Rent-to-Own: If the seller agrees, a lease option can also bring the benefit of renting the home to be purchased at some point in time. One possibility may be that part of the rent paid will be set off against the price of the house purchased.
Time to Improve Credit: If so, it makes sense to secure this particular home and purchase the rest of the requirements within the specified timeframe, as it essentially provides time to fix a mortgage and consider the down payment portion of the purchase at a later date.
Speak to a Realtor
Local Expertise: A local realtor should have a couple of ideas for you regarding the types of finance available from where and also the kind of properties you would be comfortable considering.
Try Other Lenders
Credit Unions and Smaller Banks: There are instances when some local institutions, such as credit unions or even local branches of some banks, might be less rigid regarding their criteria and could extend loans to people with poor credit histories.
You have bad credit and tax obligations and no down payment. How do you go about purchasing a home? If you try to improve your overall credit profile, look for down payment assistance programs, apply for an FHA loan, and inquire about having the seller finance or lease options available. Most importantly, you should find a real estate professional to adjust the advice according to your case. If you have any questions, do not hesitate to reach out!