Is leaseoption home buying a good idea? I cant get a loan due to my credit score. Can I lease a house?

Question

I want to buy a house, but because of my credit score it is very difficult. Can I get opinions on this program on leaseoption home buying. Do you think this is a good idea? Brokers or loan officers help?????

Was is in it for them? how do they benefit from leasing a home?

Answer 1

You should have the same approach as if you were going to purchase a home. Can you afford the lease payments? How much of your lease payment will be applied toward the price reduction of the house when it is time to exercise your purchase option? Lastly, will you be able to afford the house payment once you get a loan and purchase it? Many times, the lease payment is much lower than the payment you might have when you purchase it. Leasing a home to purchase can be a great way to buy a home as long as you kow what you are getting into.

You can also try buying a home through seller carried financing. Thats when a seller is willing to take monthly payments at a certain interest rate over a period of time on the entire or partial balance of the purchase price. I have helped many people just like you with this method. You can in most cases get 65% to 80% of the purchase price through a lender with job and a pulse. The seller would simply be the 2nd mortgage for the remaining 20% to 35%. Most local escrow agents or closing agents can help you with the paperwork on the seller carries second mortgage.

Another option is to look in the paper. Many times you can find sellers willing to make arrangements with you as long as you are willing to pay the mortgage. This is very similar to lease to own but would allow you to be put on title to the home as long as your state allows it. You will see ads like "Fix to Buy", "Can you afford $**** to own a home?". These people are usually very desperate to get out of thier homes.

Be sure to check with a good real estate attorney on these options. Talking to real estate agents or a loan officer might not be the best thing to do. Many times they will have very little information on these options since it may not involve a traditional real estate transaction or even a mortgage loan. Many of my clients come into my office discouraged because some real estate agent or loan officer told them it was a bad idea. They only tell you that because they have very little knowledge and also they can't make any money from a commission that way. I have attached a link to a company that might be able to help you. You can email them and they will answer any questions you might have.

Good luck

10 years finance experience and a real estate investor.

Answer 2

Yes and No -- If you do so make sure it is a land contract and it is recorded in the county deeds office. Then yes -- work hard to clean up your credit and pay ONLY by check and KEEP a copy of all checks. In just a year or 2 you will be treated as a refinance by most lenders. If not recorded then any thing the owner does can result in forfeiture and or foreclosure on the property and you may not be at fault. Even if it is recorded then when you pay monthly --what happens if the current owner does not pay a mortgage on the property and a foreclosure happens you could be out all $$. In other words how much do you trust the current owners?
I am a Mortgage Banker in Tennessee.

Answer 3

Buying a residence is a MAJOR exercise. If you don't seem to be finanically in a position, Murphy will transfer into the spare bed room. You recognize Murphy, he is the fellow from Murphy's Law: "Anything that may pass mistaken, will." Here's what you have got to do, with the intention to be certain your new residence is a blessing and no longer a curse: one million) Cash reserves within the financial institution. Six month's costs. Otherwise, Murphy will be certain you lose your process 2 weeks once you signal the loan. two) No different money owed. Pay off the entire bank cards. Otherwise, Murphy will be certain you are paying curiosity, mortgages, and no longer have cash for whatever else. three) Down cost stored up (20%) If no longer, Murphy will be certain your residence fee drops (he is been busy doing that), after which supply you an present to relocate to a higher process that you'll be able to ought to flip down. four) Find a condominium with low-priced repayments.