Consider this if You have been Turned Down for a Mortgage!

If you have recently been turned down for a home mortgage loan, it can be easy to get discouraged.  You probably feel like your dreams have been shattered.  This is especially true if you have already found the home of your dreams only to find out that you are at least a year off from qualifying for a loan.

If you are in this situation, it is time to get creative!  Believe it or not, owner financed homes and rent to own homes are fairly easy to find in the current housing market.  Depending on their situation, you may even be able to negotiate with the seller on a home that you have already found!

First, you need to consider whether you want to rent to own a house or try to get owner financing.  There is a big difference.  Owner financing offers tax benefits.  If the contract is structured properly, it also qualifies you for the $8,000 homebuyer tax credit until April 30.

Houses for rent to own do not offer these benefits, but it does give you the flexibility as to whether you want to purchase the home at the end of the contract period.  Depending on your situation, you may be more comfortable having the right to purchase but not legally being required to do so.

Before you decide which route you want to go, it is a good idea to talk to a mortgage broker.  There are mortgage brokers who specialize in working with people with bad credit.   They may have more experience in dealing with people who are in your situation.  As such, they will be able to tell you what you are going to need to do to qualify for a mortgage.

If there is any doubt that you will be able to qualify at the end of the rental period, renting to own can be a safe option.

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