On a daily basis, we are told that the economy will not grow unless money is more freely available for people to use and the staple housing selection becomes more affordable. We have seen a significant correction, as home values have fallen way off the overly inflated peaks from a few years back. You would have thought that millions of people would be more eligible to buy homes now, as values have dropped up to 35% compared to where they were. This is not the case, however, as money is much tighter to come by, even as home values have been shrinking this way. This has just resulted in the overall availability shrinking and not improving. If you’re looking for a nice Midwestern dream home in suburban Detroit, this monetary constriction could make it even further from your reach than ever.
Generally speaking, buying a home with poor credit has always been somewhat of a challenge, but it seems to be even more so now. Many books will undoubtedly be written about the great recession and how we got there and numerous chapters will undoubtedly be devoted to the role of the predatory lender, a lack of oversight and greed on Wall Street and other places. It certainly appears that a combination of circumstances led to the “housing bubble” and brought us to where we are now. Most people are not concerned about the causes, as all they want to do is find their dream home. It’s certainly true to say that first time home buyers with bad credit are more likely to hear the word “no,” than anything else as they try to find their family a starter house.
As we are told that the value of homes is now starting to bottom out, this should be an ideal time for somebody to buy. If it’s true that housing is at its most affordable rate for many decades, why is it difficult to persuade those mortgage lenders and bank managers to give us money, so that we can move in? So how do we make housing affordable? The answer may well lie in the adoption of land contracts. In the Midwest, especially in the state of Michigan, land contracts are popular vehicles, allowing those who have been turned down elsewhere to start again.
A land contract is negotiated between a buyer and a seller. It’s a great situation, because the seller is motivated to sell the property for serious reasons and the buyer is very interested in moving into a property. This makes the terms and conditions very flexible from each party’s perspective and when buying a house with poor credit, the buyer can negotiate the amount of money necessary on a monthly basis, as well as the specific number of repayments.
There are far fewer restrictions associated with land contracts when compared to traditional bank and mortgage company provided products. Production costs and finishing costs are normally paid by the seller and from the buyer’s perspective, there are few hidden costs. So long as all parties are realistic and open in all their negotiations and agreements, this can work for both parties. Anyone considering a land contract would be advised to work with experts who can help to smooth things over. Many people have been able to move into their dream homes in these most recessionary of times by taking a good look at land contracts.
