Recent Foreclosure or Bankruptcy are NOT significant factors with a contract for deed!

Although credit is an important indicator of how you’ve handled debts and creditors in the past, your score is not relevant to buying and affording a home.   Obviously this is very different from what the banks and mortgage companies will say!  Here’s the reason:  One’s credit scores will rise and fall throughout their life.  Significant events ~ job loss, death, poor business decision, even pandemic, housing market crash, etc are for the most part, unavoidable. 

The most significant components of successful homeownership are down payment andreliable income.

The benefit of knowing and understanding credit, is to improve the credit score to where less expensive loans and mortgages are possible.  For a contract for deed, credit is important in helping determine the timing for when one may qualify for a mortgage to refinance the contract for deed.  The contract for deed is NOT a long term method of financing a home….but a short term tool. Once your family, finances and credit are stable, you can then focus on the necessary credit improvement. This is much less stressful since you are already IN the home!

You CAN purchase a new home on a contract for deed with a recent foreclosure – even when IN foreclosure – provided you have at least 10% (or $30,000, whichever is higher) for down payment. The source for down payment can be proceeds from the sale of your home, other financial assets (example: 401k), and possibly a gift from a relative.

It is best to discuss the details as we want to make certain the circumstances that led to the foreclosure will not continue to hinder your ability to make house payments going forward.

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Your CREDIT SCORE is NOT significant factor with a contract for deed!