What if you have good credit, but don’t quite qualify for a mortgage loan?  What are some other options to get into a real estate investment on your own credit?

1)      If you don’t have enough down payment for the property you want, a lease-to-own contract may be an option.  Lease-to-own gives you time to accumulate the down payment and qualify for a mortgage loan, while locking in the purchase price. If you negotiate the deal correctly, you can even lease it to a tenant at the same time.  It’s common for lease-to-own contracts to include a premium over and above the rental in the monthly payment, but that is put toward your down payment.  Of course, if you’re working directly with the seller, you can often negotiate excellent terms.

2)      If your credit score is good but you’re short the income to qualify for the standard mortgage payment, consider short-term loans with very low interest rates and a balloon payment within 2, 3 or 5 years, also known as ARM’s (“adjustable-rate mortgages.”)  It will be necessary to make sure your exit strategy is such that you’ll sell before the balloon payment comes due, or have the improved income to refinance at that point.

3)      In some cases, your good consumer credit will allow you to make a cash withdrawal against your credit card for the down payment.  The caveat is that consumer credit interest rates and payments are usually several times that of mortgage and other interest rates.  Only go this route if other sources of funds are not available to you.   Or, if you are flipping the property in a short period of time, before more than one or two payments are due, a cash withdrawal may be a rational option.

4)      You can use your own credit for a traditional mortgage loan.  This is often the best bet, especially if you’re just beginning your journey as an investor.

As an investor, it’s important to take care of your credit so that it will be ready to open many doors of opportunity for you.

What other ways have you leveraged good credit to get into excellent real estate deals?

For more information on how you can escape the rat race for good and create lasting, generational wealth with real estate, download my FREE ebook, “How to Find Underpriced Properties: Secrets for Creating Wealth with Real Estate in ANY Economy.”