If you are looking to buy a co-op, but you either have no credit or bad credit, then you are probably a bit nervous about the prospect of applying for a mortgage. Many banks might not want to offer a mortgage to someone who does not have stellar credit. So, if you're score is no where close to 700, you might be feeling a bit despondent. However, that doesn't have to be the case. There are several ways to go about buying a co-op even if you have zero credit history. Here are a few ways to go about planning your future home purchase.
Save Up For A Large Down Payment
The more money you have for the down payment, the smaller a mortgage you will need. So, a good idea would be to consider saving up for a very large down payment. If someone with great credit might only put up 10 or 20 percent down, you might want to look to have much more saved up to put down. This might mean choosing a smaller place than you might have initially have considered.
Choose A Co-Op With No Board Approval
Another thing to consider is what sort of obstacles you will encounter once you meet with the co-op board. Many boards might not like the fact that you have bad credit. It depends on the co-op board, but some are very strict and want to examine your finances. They don't want someone buying into the building who is not going to be able to handle the costs of repairs and maintenance fees that are associated with living in a co-op. The alternative to this is to find a co-op that has a no board approval option. This way, once you are ale to secure the approval for a mortgage, you can move forward with buying your co-op and not have to worry that other people in the building will be able to put the kibosh on the whole plan.
Find A Company With No Credit Financing Options
Even if you save up a large down payment, you will still need to get a mortgage unless you intend to buy the co-op outright in cash. And this can pose a problem for people who (try SWE Homes) have zero credit history, or really bad credit history. The solution is to find a company that deals with people with no or bad credit. These companies focus on people who have income but don't have credit. It's a perfect solution to your particular problem. Even if you do somehow manage to save up lots of cash, you might still want to get a mortgage for tax purposes, or simply because you don't want to spend all of your money.