Our landlord wants to sell us our rental home and said he got us approved for a loan, we have crappy credit?

Question

how can this be?

He told us that as long as our score is over 520 than he could get us into the house.

He is a real estate agent by profession and we would be going through the company he works with.

He is coming over tonight and I want to know if this sounds up and up to anyone.

Also he said we do not need any money down because they would add all costs into the loan.

Answer 1

With the real estate market starting to cool, loan agents are coming up with more and more creative ways to "get people into loans." The upside is that you can get into a loan with really crappy credit, the downside is that the loans are even crappier than your credit.

Typical sub-prime loans (that is, loans to those with mediocre or bad credit) include low teaser rates that seem appealing, but will readjust in a few years, often leaving you unable to make your monthly payments.

Worse, many of these loans are interest only, which means you're not actually building any equity, or reducing the amount of the loan. Even worse than that, some of the loans are "reverse amortization" loans on which you're not even paying the interest, hence the amount of the loan is actually going *up*!

Be wary of anyone who wants to help you buy their house by finding you a loan. They're looking to sell their house, not help you. And once the sale is through, you're on your own to make the payments, or find your house repossessed by the bank!

Answer 2

First of all, if your credit is bad and he HASNT run your credit he cant tell you for sure you will get a loan. Now, unless he is going to be the one your borrowing from (Owner Financing or Carryback) your looking at a Hard Money Loan. These come with extremely high interest rates, and some really ugly rules that you MUST follow. If you miss one payment they will foreclose and immediately take action to take the house from you.

I say go to someone OTHER then him to get a second, or even a third opinion about what you can qualify for. There is a free online credit reporting website you can pull your own credit. Free Credit Report.com.
You have the option of having all 3 agencies give you your FICO (3 bureau scores) and most all lenders will use the MID score. So if you have 3 numbers like 550, 579, and 600. Your credit score will be 579 and that will be the score used for your loan.

If your score is bad due to poor credit in the past or lacking credit you may want to spend some time reparing your credit first. It can save you thousands of dollars later, and more importantly...your home!

Remember all monies you dont pay up front, or have saved for closing costs adds more to your monthly payment. A Good Faith Estimate will give a high estimate of what you will be paying for. ALWAYS ASK FOR THIS BEFORE SIGNING ANYTHING. Be sure you fully understand it before you sign any purchase contracts. Also, dont go house hunting until you are pre-approved by a LICENSED and PROPERLY REGISTERED LENDER. There are many scams out there, and that saying buyer beware is very important to remember.

I wish you luck, and hope that things are legit, and are truely in your best interest.

Answer 3

What you'll be getting is 100+% loan at an exorbitant rate of interest. It's a no lose situation for the landlord. First, he'll charge you too much for the house (worth $200,000? he'll say it will cost you $225,000). Then he'll tack on fees you wouldn't believe and add another couple of thousand to the cost. Then he'll make sure you're going to pay huge interest costs. Then, when you can't make the payments, he'll repossess the house, get it back, you'll have even WORSE credit and he makes out like a bandit.

If it sounds too good to be true, it is.

If you really want the house, get it appraised by an independent appraiser. Have a home inspection done. Make certain there are no liens on the house. See what other banks would charge you for closing costs and interest rates. Then and only then should you start talking seriously.

Answer 4

I would suggest to have a second opinion. Have the house appraised and find out exactly how much the property is worth. Once you have this figure, ask your landlord/agent on exactly how much he is asking for the house. Only then will you will know what step you should take next. Goodluck!!

Answer 5

Today I made up an terrible false Yahoo Answers Question wherein I received a fats chick pregnant within the core of the park and made her stick a hose up her hoo ha so she swelled up like a balloon. Then the scorching lady dumped me. FML Seriously dude. Seriously.

Answer 6

Don't guess. Run the numbers. Go with your gut, but beware of agendas...success leaves clues. That means if you watch what people _do_ more than they _say_, then examine their results, you'll have a clear path.

Answer 7

Go for it!!