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How To Become A Homeowner Without Any Credit By Leasing To Own

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Your credit plays a significant role in your ability to get loans, which is why you might struggle to buy a house with bad credit. There is a way to purchase a home with no credit, though, and this method involves leasing to own a home. If you do not understand what this is or how it works, here are the details you need to know.

You Find a Homeowner Willing to Keep the Loan

The first step is finding a homeowner willing to keep the loan on their home while selling the house to you. You purchase a home through this method by financing it through the homeowner. The homeowner keeps the loan, but you agree to pay for the home. You get to move into the house and live there like it is yours, but you do not have a mortgage lender. The homeowner that sells the house acts as a lender in this deal.

You Make a Down Payment and Agree to the Terms

To buy a house like this, your credit will not matter, but you will need money for the down payment. The down payment protects the seller of the home, and it shows that you are serious about buying the house. You also agree to a selling price and terms. The terms include the interest rate you pay the seller and the monthly payment amount. It also includes a contract that states your responsibilities and limitations with the home.

You Live There and Care for Everything

Once you settle the contract, you get to move into the house. You will have to handle all the maintenance the house needs, and you will pay the property taxes on the home. You might not be able to make changes to the home unless you get them approved by the seller.

You Get a Loan When the Contract Ends

One of the terms you must agree to is an end date for the contract. The end date will likely be five to ten years from now, and it is the date when you must get a loan from a mortgage lender to pay the seller the remaining balance on the loan.

There are risks involved with leasing to own a home, but this is the best way to purchase a house without any credit. If you are interested in finding homes for sale through lease-to-own deals, contact a real estate agent today.