How to Get a Home Loan

Is it possible to get a loan with bad credit? A lot of people really wanna know because they’re in that situation. Let’s talk about it. If someone wanted to buy a property or invest in real estate but they have bad credit, do you think it's still possible that they could get a loan and still buy a property? If they have bad credit? NO. Do you think you even could, is it even possible? It's tough. Alright, let’s jump into the meat and potatoes on this subject. 

The first thing I wanna do is I wanna give you three different strategies. Here’s the first one. You gotta work with a loan broker or a mortgage officer that is brokering out to many different banks and is doing high volume. Let’s talk about why. If you go directly to a bank and you walk into the bank that you work at, they’re always gonna wanna offer you and pre-qualify you for some type of loan. But the bottom line is that’s just one bank, and not all banks are the same. 

They weren’t all created equal and they have different rules. So I recommend number one, going to a broker that works with 20, 30, 40, 50 different banks. Now, they’re not gonna work with that many unless they’re a serious operation doing high volume. So you may wanna ask how many hundreds of millions of dollars’ worth of real estate do you broker out each year? If they give you a funny look like “are you crazy that’s a lot of volume,” that’s not your loan officer likely that can find the right option for you. 

Because there are banks out there that work with people that do have bad report credit. Second thing I want to talk about is what do you do if you have bad credit to actually get it fixed. How important do you think credit is? Well, I mean in this day and age, it feels pretty important. How long do you think it would take to fix your credit? 8 years. But I believe it it would probably take at least you know maybe a year. 

How do you fix bad credit? By paying your stuff on time. This strategy really comes down to doing some credit maintenance. Sometimes we’ve got hiccups, sometimes we’re late on a payment and then all of a sudden we say hey “I’ve got to get serious about qualifying for a mortgage.” Even if you’re using your credit to buy a lot of real estate the way I have in the past, you’re gonna need to do maintenance; so whether you call it repair or maintenance it’s good to find the company out there that you can trust. 

This is not one of those things where less is more. You’re not looking for the cheapest program. You’re looking for a company that has been in business for a really long time has worked with thousands of clients and keyword is 'attorney'. If an attorney is involved it’s more of a legitimate program and what they’re doing is they’re using a nice little strategy. There’s a couple of them that I wanna share with you. Number one is they’re going to challenge the inquiries. For example, I remember that one time I was trying to qualify for a mortgage and I found out that my credit had dropped in the last 90 days by 50 points and I was alarmed. And when I found out why it’s because that last couple of months I had been shopping at the Gap, at JC Penney’s, or wherever and they kept offering me that seductive 10% discount if I’d use the in-store credit card and applied for it. 

Well I didn’t know that every time I was getting that discount to save a few bucks that I was actually putting out an inquiry and that that would temporally drop my credit. So the credit repair company I worked with... they challenged the inquiries. And by law if you send a challenge letter to whatever company did the inquiry, if they don’t report back within a short timeframe with the response and whether the inquiry was legitimate or not, then they have to drop it by law because the credit bureau has to report that. Now, that’s really good news for you because most companies are not set up to take those requests seriously so they just kind of fall by the wayside and I actually saw my 50 point drop go back up 80 points and my credit got stronger, okay? 

Find a good credit repair company. But here’s the third thing... if you find a broker that doesn’t have a bank that can give you an option and if credit repair is going to take too long for your needs, then your third resort is to do seller financing. Seller financing is basically where someone else already has the house that you want and instead of selling it, they’re actually willing to finance you the house. Now, that’s really neat because they’re not a bank and they’ve got different criteria. They might ask for a little bit of a different down payment, they might ask for a higher payment. Seller financing is an amazing strategy for actually walking into the house that you want. How do you find these? 

What you do is you go through the paper, find the house that you want, typically seller-financed are not presented by realtors. And so if you have a “for sale by owner” you can call them up and say “hey I’m not in a position to buy your house but would you rent it to me or would you do a lease option and work with me until I can buy it in a couple years because I’m doing a couple of things with my credit?” And there’s a lot of people out there that are willing to do that and guess what, you’ve just negotiated yourself right past the bank by using the person that has the mortgage, has the bank, and boom you’re right into your house. 

Now, here’s the hidden strategy with this really great deal that if you seller finance yourself into a deal, you wanna negotiate it where they’ll actually put you on title. Because if you’re represented on title for at least two years then after two years you can actually refinance onto the house. Now think about that, you basically back-doored yourself into a super easy program that most banks will do because if they see you’ve been on title for two years then they’re going to say well why wouldn’t we let them refinance it. And qualifying for a refinance is way easier than qualifying for a purchase. 

So what’s the big moral of the story? Listen, if you’ve got bad credit, you got options. You can get into real estate and you don’t have to wait. If you need to wait or feel like that would be the best option for you, then just focus on doing some credit maintenance and some credit repairs and stick with it. That’s the key. Real estate done correctly is a long-term play, getting into a home, and having that slice of American dream is really key, so stick with it. Hey! Thanks for watching and subscribing to REITV. Down below you can post questions about real estate and give us some good ideas of some other videos that you'd like to be seeing, and we look forward to seeing you next week.
Powered by Blogger