If you’ve ever shopped for a loan or mortgage, you know how much of a difference your credit score can make. Higher scores can help qualify you for better terms, lower interest rates and special funding only offered to low-risk borrowers. However, nobody’s credit is perfect, and bad credit can take a long time to improve. If you’re interested in flipping houses but have bad credit, there are plenty of funding options available to help get you started.
Here are the best ways to get funding to flip regardless of your credit score:
Private Loans
If you have bad credit, a private lender might be a good option for funding a flip. The major reason to consider a private loan is that they come from sources who don’t follow the same rules and criteria as traditional financial institutions. Therefore, they might not weigh a credit score as heavily—some may not require a check at all. Because every private lender is different, it’s crucial to research the options carefully, so make sure you can still work within their custom requirements.
Home Equity
You can borrow against the equity of your current home to fund a new purchase. This includes cash-out refinancing, home equity lines of credit and home equity loans. The first option means you would refinance your current mortgage and keep the difference between the loans as cash. Home equity lines of credit work like credit cards to offer you money up front that’s borrowed against home equity. Home equity loans are like traditional mortgages, but use your property as collateral.
Crowdfunding
Crowdfunding is an excellent way to gather financing for a project from multiple sources, none of which require a high credit score. By using one of the major online crowdfunding platforms, you can set up a fund for your fix-and-flip purchase through contributions from people all over the world. Crowdfunding is the most flexible option but also requires some marketing savvy to be successful. If you’re willing to put in the work, this is an excellent option for financing your project regardless of credit.
While your credit score matters in many financial situations, there are ways to achieve your goals without a high score. No matter what kind of credit you have, these three options are great to consider for funding your flip.
About the Author
Sheida Rezazadeh
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Our philosophy is simple: clients come first. We pledge to be in constant communication with our clients, keeping them fully informed throughout the entire buying or selling process. We believe that if you’re not left with an amazing experience, we haven’t done our job. We don’t measure success through achievements or awards, but through the satisfaction of our clients.
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With over two decades of experience in the real estate industry, I derive immense satisfaction from assisting clients in realizing their real estate aspirations. My journey in this field commenced with personal investments and the management of multiple properties, providing invaluable insights into the dynamics of the real estate market. Over the years, I have refined my negotiation skills, accumulating extensive knowledge and experience that empower me to deliver exceptional service to my clients.
As a seasoned professional, I specialize in residential, luxury, multi-unit, and commercial real estate. I possess the acumen to secure top dollar for sellers and the best possible prices for buyers. Recognizing the significance of creating a home sanctuary as a mother and wife, I understand the security that real estate investments can bring. It's not just a transaction; it's a life-changing experience, and I am dedicated to guiding my clients through every step of the process.
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