Once your credit improves, you can apply for a mortgage and pay off the contract for deed or rent-to-own and then have a regular mortgage. But...you will need your contract to be written so that this is allowable and enough time available for you to get your credit back in good standing. If you want to talk some more about your particular situation, please feel free to give me a call at 612-802-5209
I have heard that renting to own is usually a nightmare!
Don't hesitate to ask me anything :)
Cody Anderson, MN Licensed Realtor
Metropolitan Home Team
* pay you bills, but do not pay off your creditors
* save some money; live well within your means
* do not consider Lease/Options; they benefit the Seller, not you.
* be patient; the Real Estate Market will be there when you're ready.
As far as rent-to-own options, your best bet is to approach home sellers. Depending on their situation, it is possible that they would entertain such a proposal. And always be wary of those you find on the internet.
Best of luck!
Hope it all goes well for you. If you ever need someone to help you review a lease I can help.
Cody Anderson, MN Licensed Realtor
Metropolitan Home Team
Coldwell Banker Burnet
Not sure where your cousin got their info, but I'm really sorry it turned out to be a scam.
There are ways to build your credit if you want to go for it. It's just a matter of making your payments on time for a good 6 months to a year for car loans, credit card payments, student loans, rent, etc. That's the best way to get your credit back to where you want it.
If you're truly buying rent to own, there will be a contract that indicates WHEN you will actually be buying the property. So, that means your plan to get your credit scores back up is is MUST. If you DON'T adhere to the contract and buy the property when you agreed to in the contract, the sellers/original owners can cancel the deal and they get to keep all of the money that you've paid toward your downpayment over and above your rent!!! That's a bad deal for you.
If you buy on what we call a contract for deed or seller financing, the sellers usually want you put a substantial amount down, like 10-15-20% at least. You will also have a date on that contract that indicates when you will be buying the seller out and securing outside financing, like 2 years, 5 years something like that.
Real estate agents can find rent-to-own properties for you on the MLS, but I'll be honest, they are difficult to find. Especially these days, the rental market is still very strong, so most sellers want to stay in the driver's seat and either just rent or sell outright.
One point to keep in mind: Many lease-options (rent-to-owns) aren't listed that way on the MLS. They may be listed for sale and the owner may be willing to rent before selling. Conversely, they may be listed for rent, but the owner is open to selling. Sometimes--interestingly--they're listed on the MLS twice: Once for sale, once for rent. In other words, very often you (or, more likely, your agent) will have to approach the owner and propose lease-options.
Here's a link to a blog I wrote on how to find them: http://bit.ly/findaleaseoption
Hope that helps.
P.S. It should never be necessary to "pay for lists." There's plenty of profit in legitimate lease-options and for people who put them together. When I've done lease-options, my goal is to make sure as many people as possible know about them. Why would I want to limit that knowledge by charging for a list? And one other tip: Use a Realtor who knows, understands, and is comfortable with lease-options. Many are. Some aren't.
That is a good way to do it, because it is really hard to find legitimate rent-to-own listings. The only place I ever look is craigslist, but you do still have to be careful about scams.
The other side is get working with a loan officer to rebuild your credit. Too many people procrastinate on fixing the credit issues. Those people are not meant for rent-to-own because they will get burned. I can give you a referral to get started on this. You will need to figure out how long it will take until you can purchase the property, because that will determine the length of your lease on the rent-to-own.
Hope to hear from you soon!
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.
*If you thought my answer was helpful, please give me a â€œThumbs Upâ€ or â€œBest Answer.â€ Thanks!
There are many programs available for a person who has less than perfect credit. With certain types of credit you may only qualify for an FHA loan. The best advice I can give to you is to speak with a qualified mortgage professional who can look at your situation and give you tips to increase your credit score. There are ways to boost your score significantly within 6 months to a year. If you have any questions please call me: 612-840-1093.
As far as credit goes, you should talk with a mortgage professional and they can give you advice as to what can be done to help raise your credit score. I've got some contacts in the industry if you need some.
Thanks and good luck!