The Karlin Law Firm LLP - Business Law Attorney

Providing quality legal services to statewide and national clients in ADA defense, Personal Injury, business and real estate for more than 35 years

Providing quality legal services to statewide and national clients in ADA defense, Personal Injury, business and real estate for more than 35 years

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How to buy a house with poor credit

When a California resident wants to buy a house, a lender will run a credit check. If prospective buyers have a low credit score, it may hinder their ability to get a mortgage. However, those with poor credit may still have an opportunity to purchase a home. One option may be to enter into an owner finance arrangement.

In this scenario, a buyer will make monthly payments of principal and interest to the seller of the home who will take back a mortgage. It may also be possible to enter into agreement that allows a buyer to first rent the property with an option to buy in a year or two. This may be beneficial as a potential buyer gets to know all the pros and cons of a property before making a long-term commitment.

First-time borrowers who have a credit score of at least 580 may be eligible for an FHA loan that comes with a down payment of as low as 3.5 percent. Those who have a credit score under 580 may have to put 10 percent of the purchase price down. Credit scores may be determined by the length of a borrower’s credit history as well as payment history and amounts owed to creditors.

There may be many different ways for an individual to buy residential property. Regardless of how a person chooses to make the purchase, it may be worthwhile to do so with the assistance of an attorney. There is a lot of paperwork involved in the escrow process, and an attorney who has experience in this type of a real estate transaction can review the documents to make sure that they are in order.

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