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BRITNEY JONES, Other/Just Looking in Kansas City, MO

Hi, Me and my husband are looking for a rent to own house. Our LEASE is up on Dec. 3rd. What are the first steps we need to take?

Asked by BRITNEY JONES, Kansas City, MO Mon Jul 15, 2013

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Guess what happens when it comes time for you to try and pay off a rent to own contract. The mortgage underwriter MUST follow the rules and they will NOT match what you and the seller put in a rent to own contract. This is one of the reasons I have NEVER paid off a lease to own contract for a “buyer” in the last 20 plus years. Save your hard earned money and fix whatever issue is keeping you from actually buying a home and getting the title in your name. See the info I linked for you below,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
1 vote Thank Flag Link Mon Jul 15, 2013
Britney,
You have provided sufficient lead time for a good outcome.
William has provided incredibly insight advise.
Choosing to not enter the tail-spin of rent-to-own perils, I would advise following Wiliam's suggestion of contacting a real estate professional who knows, who has expereince, finding and creating a benefical rent-to-own situation.

Take a look at this Trulia Q&A link regarding "RENT-to-Own" where the tail-spin is explored.
http://www.trulia.com/voices/Home_Buying/What_is_the_average…
1 vote Thank Flag Link Mon Jul 15, 2013
what location are you looking for? I currently have a house on the market that I may consider a rent to own situation. Feel free to email me at shantup13@gmail.com if interested in learning more. House located in parkhill school district- 4 bed/2.5 bath- many updates and in a great neighborhood - walking distanct to pool.
0 votes Thank Flag Link Sun Jul 21, 2013
If you are a first time home buyer or have not owned a home in the past 3 years you may qualify for down payment assistance or other financial aid. If your goal is to purchase a home then one of these options would be more beneficial to you and your husband than rent to own. If you would like any other information you can call me at 816-350-8400.
0 votes Thank Flag Link Mon Jul 15, 2013
Good morning britneym18,

Rent To Own is a better deal for the Seller than it would ever be for a potential Buyer.

The basic concept is finding a way to "force" savings towards a down payment by including a portion of the monthly rental that goes towards that savings. You pay your rent every month and your Landlord deducts a pre-determined amount to hold in a special bank account, called an "escrow" account. Your Landlord holds that money until you have saved up enough---through this "forced-savings" method---to meet a down payment to purchase the home.

The terms of the purchase price, including the down payment amount, and the amount to be set aside from the rental for down payment, are all set down at the time of lease signing.

It's all about helping the renter/tenant save up enough money for a down payment to buy a home (in this case, the one you're renting). But this is a better deal for the Seller because he gets to lock in a purchase price and a buyer today for a future sale.

Saving money for a down payment? Well, heck, you can do that on your own.

If you are dedicated to the idea of buying your own home, you can create your own savings plan to save up enough money for a down payment. And when you have saved up enough for a down payment, if that takes a year or two or more, YOU get to decide on the price you're willing to pay for the house at that time based on current market conditions. You won't be locked in to a price that may be a lot higher than what the house is worth in the future.

With Rent To Own you'll be locked in both to the house and to the price, even if it takes you 3 years to save enough through the forced savings of the rent payments. What happens if three years from now your life situation has changed? Maybe you need a bigger/smaller home. Maybe your employment has relocated. Maybe your credit or income is insufficient to qualify for a mortgage loan.

Find a way to save up on your own; not with Rent To Own.

Sit down with a local Mortgage Banker and get yourself prequalified, too. You may find you're better qualified than you think you are, and, if you're not, at least you'll know how much loan your income and credit qualify you for, and how much you have to save towards down payment and closing costs.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks
0 votes Thank Flag Link Mon Jul 15, 2013
Finding an experienced professional may help you avoid many of the pitfalls associated with finding a new home. The largest issue is finding ethical sellers that are willing to sell a house on a rent to own contract. There are a few houses that can be found with the assistance of a licensed real estate broker that may provide you with the best options.
If you decide to go it alone, use the resources of a legal professional, attorney, to review the contract to protect your interests.

If you have further questions, feel free to email me directly at
william@storybookrealty.net

All the best,
William Robison
Storybook Realty
0 votes Thank Flag Link Mon Jul 15, 2013
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