Hello All,
I’m looking for a source of info that will show me how to buy a house with bad or no credit. I’ve heard of lease-purchase or lease-options but I’m not sure how they work. Similarly, are there any listings of companies that will extend credit to people with no/bad credit rating? I’m looking for Canadian info specifically.
I want to buy a house!
Thanks,
NobleBaron
If your thinking of buying a new home , email the various home builders in your area with what you want to look at , in terms of financing. Explain your situation beforehand and await the responses.
Its actually easier to buy a new home , even with spotty credit , than it is to buy a car or get a normal loan. The downside is that usually the rate of interest may be higher on your mortgage than a comparable one down the street.
While your credit is one thing that they look at , they also look at your employment record , how much your going to be putting down on the house and what assets you own , normally RRSP’s , RESP’s and what not.
That leasing option that you mention , I believe is a corparate deal rather than something thats offered to the general public ,but your own research on that will tell the true story. What it does resemble is something that pratt homes does for clients with special needs regarding financing.
You paint the house yourself , do the post cleaning from all the trades and a few other things , and they “pay” you. In reality , this money goes to the down payment on the house. As well, CDIC also puts up some coin for first time home buyers , either a check , or garunteeing somewhere between 2 k and 10 k , not sure which , but a quick google should point the way.
Declan
As with so many other banking transactions, there is an easy way to get a mortgage: prove you don’t need one.
Do you have assets (stocks, bonds, a business, a fleet of Hummers, wads of unused cash?)
How about wealthy relatives who would be willing to co-sign for your loan?
Are you employed and is the job stable, i.e you are not working for Fly-By-Night Plumbers (or Nortel)?
Do you have “expectations” of future income (a trust fund, Great-Aunt Tilly’s will)?
Seller Take-Back Mortgages are another way you can improve your odds. If you are buying a resale home some sellers are willing to give you a mortgage on the home they are selling you.
Assuming a mortgage is also a good way. Someone wants to sell, and you take over their mortgage. The only problem there, is you have to take out a loan to pay them the equity they have in the house.
Cmhc
The Canada Mortgage and Housing Corporation does have grants such as the RRAP - Residential Rehabilitation Assistance Program - to help low-income homeowners upgrade their residences that require major repairs (structural, wiring, plumbing). The catch seems to be that you already need to own the home; they don’t mention grants that allow you to buy the home if you don’t already own it.
CMHC also provides “mortgage insurance” that assists with mortgages. From this CMHC website :
Again, your first problem will be to find a bank that will give you a mortgage loan for 95% of the property value if you don’t have an established credit history.
This isn’t exactly in response to the OP, but I think the first step is demonstrating that the circumstances that led to your bad credit are now over. Do you have a steady job and no current credit load?
I don't want to harsh your buzz, but the process of buying a house can be expensive, not just in the sense of points and financing costs, but also in the sense that if you're buying an older house, you have to assume that you'll immediately be dumping at least a few thousand dollars into random upkeep, maintenance, and renovation issues. Unless you're prepared to weather at least one crisis in the first year (e.g. furnace dies), then it would be wiser to rent for a while and work on improving your financial picture. Otherwise, you could end up with an even worse credit history and no house at all.Thanks everybody for answering my question… your answers have really helped me consider other possible options…
