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A rent-to-own, often called a lease/option, is a contract under which
you rent/lease the home with a future option to buy, and it can be a
brilliant choice for the family in need of just-that-little-extra-time
to qualify for a loan.
And with no guarantees in the real estate market, locking-in a purchase price will likely prove to be very advantageous.
We will set a purchase price at the current market value. In the
future, when the real estate market rebounds and prices increase, the
option will remain to buy at the locked-in price.
The rent-to-own process: We will set a purchase price to the property, a payment, and the time frame within which you must obtain bank financing.
A rent-to-own is not long term financing. You must qualify for a bank loan within 1 - 2 years.
Does any of my monthly payment go toward the purchase price?
In many cases, yes! You are building equity in your home while you
rent. A portion of your payment will be added to your down payment.
For example, if $250.00 goes toward your down payment each month, at the
end of a one-year term, you will have added another $3,000.00 to your
down payment. ($250.00 x 12 months = $3,000.00) Through the rent-to-own
process, your down payment will increase as your payments accumulate
each month.
Is a down payment required?
YES. To have an option to buy, you must, by law, put money down toward
the property, which goes toward the purchase price of the home. Your
purchase price remains locked-in.
A quick example of the down payment process:
Purchase price - $150,000.00, down payment amount of $7,000.00. The
amount due when you qualify for bank financing is: $143,000.00
($150,000.00 - $7,000.00).
How much is the down payment?
That depends. A large down payment will help tremendously when you're
working with a bank for long term financing. You should offer as much
of a down payment as you can afford, so that we may get a home in your
name as soon as possible.
Higher down payments will give you first choice when your ideal home is
available. However, you should know that if you fail to qualify for
bank financing within the term of the lease, your down payment may not
be refundable.
I have horrible credit. Can you help me?
Most likely, yes. Depending on how much you can afford as a down
payment and just how bad your credit is, we may still be able to get you
in a property. We can put you in touch with a Credit Repair
Specialist who can assist you in finding a credit solution.
Please review the following criteria before submitting an application:
- Your gross monthly income needs be at least 3-4 times the rent.
- You must have at least 2%-6% for the Option Consideration, unless otherwise specified.
- You need to be at least 1 year removed from a foreclosure or bankruptcy.
- You can’t have had any evictions in the last 3 years.
- You must have good references from previous landlords & current employers.
- You cannot be involved in a lawsuit as a “Plantiff”, other than divorce, child custody, or auto accident.
- You can’t have any prior criminal convictions of a violent or drug-related felony.
- You cannot owe money for child support or alimony.
Application Fee - $35 per applicant.
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