How to Buy a House Without Credit

Whether you have a bad credit history or you simply have not built up enough credit to be considered for a traditional home loan, there are procedures that will allow you to buy a house without credit. While it is more difficult to purchase a home this way, many sellers will be willing to work with you to make your dream of home ownership come true.

Things You'll Need

  • Seller financing
  • Real estate contract
  • Legal advice

Step 1

Find a home owner willing to offer seller financing. Many home owners understand the state of the economy and are more interested in getting a monthly income they can rely on than having to deal with the process of going through a bank. Search your local classifieds and find the ads where it states "seller financing available."

Step 2

View the property and meet the owner. With seller financing, typically the owner might go on a gut feeling rather than a credit report. Make sure that you make a good impression and bring references with you that the owner can contact later. This will help you increase your odds of having the owner carry the title of the home.

Step 3

Work out a suitable contract with the owner. Seller financing usually requires at least 10 percent down on the property and a contract that will spell out the monthly payment that is required, as well as terms for who will carry the insurance on the property, who will be responsible for taxes as well as what will happen if you default on the mortgage. Seek legal advice before signing any contract to protect your rights as a home buyer.

Step 4

Transfer the property title to your name. Once you have signed the real estate contract with the seller and paid the down payment, you will need to visit your county courthouse and log the transaction as well as transfer the title of the property to your name. Some sellers will prefer to wait until the mortgage is paid off to transfer the title, but you will still need to log the transaction with the county for property tax purposes.

Step 5

Make your monthly payments on time. Seller financing does involve a lot of risk for the seller, but if you keep your end of the bargain, these contracts are typically quite beneficial to both parties. Keep in mind that if you default, you will lose the property as well as any money that you have already invested in it, much like you would if a bank foreclosed on the home.

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