Home Buying in 11221>Question Details

Yolande Edwa…, Home Buyer in Brooklyn, NY

Are there any legitimate rent to own homes in Brooklyn, NY?

Asked by Yolande Edwards, Brooklyn, NY Thu May 17, 2012

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9
How legitimate is it to try and circumvent the mortgage underwriting guidelines that are there to protect you?

It doesn’t matter what you and the seller agree to regarding rent being applied to the purchase price. When it comes time for you to get a mortgage the underwriter is going to follow the rules for the type of loan you use. All of the different underwriting guidelines are very specific about how to treat this type of transaction. None of them say to follow the contract between the tenant and the landlord. It gets very confusing from your side because, yes, the seller may give you a credit for part of the rent paid but the lender will not acknowledge it as down payment. Only the amount of the rent that is above the fair market rent can be counted as down payment for getting a mortgage. This is just one example of how buyers and sellers mess this up, hope the link below sheds some lite on the subject and keeps you from being hurt, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
2 votes Thank Flag Link Tue Jun 12, 2012
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
2 votes Thank Flag Link Tue Jun 12, 2012
Good advice!
Flag Mon Nov 25, 2013
To my knowledge rent-to-own is just way to get customers enter the office..
If you have a good income (50k - 90k+ /year)good credit score(680+) you can qualify for FHA (Federal Housing Administration) more info go to http://en.wikipedia.org/wiki/Federal_Housing_Administration .
You can get a loan for A 2 family use the income for the mortgage. so you will pay the difference, it will be around rent price.
If you need more information you can call me at 612-598-6298
Thx Izzy
1 vote Thank Flag Link Thu Aug 9, 2012
That is true, the seller benefits and lock the purchase price so there is no room for negotiating.
Flag Wed Jan 15, 2014
it s very difficult to save money for a down payment when rent is so high even with a good income and credit score all lenders i have contacted so far want 15.ooo plus for the down payment.
Flag Mon Sep 9, 2013
what about the down payment
Flag Mon Sep 9, 2013
Since rent to own properties may not be listed as such, consider working with an agent of your own; keep in mind that most sellers would prefer to sell outright and such opportunities are rare. Be aware that rent to own can be risky and one could stand to lose a bit of money, therefore inform yourself well beforehand, and consult with an attorney who specializes in real estate for all related paperwork. If you haven't done so yet, visit with any licensed loan officer, see if you qualify to buy outright.
1 vote Thank Flag Link Thu May 17, 2012
Hello I am interested in finding a rent to own home in Brooklyn, NY. Is there anyone that has an inventory of such homes. Or could possibly toss up the idea to a seller who's house has been on the market for a longtime and or off and on?
0 votes Thank Flag Link Mon Oct 13, 2014
I'm looking for a 4bed and 2 bath house or apt
0 votes Thank Flag Link Tue May 14, 2013
Nydiyah

If you are still looking for a home contact me at antdrig@gmail.com and I will be happy to help you to find a home
Flag Fri Jul 5, 2013
hi Gretel6817!

My "humble" opinion is NO.

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
0 votes Thank Flag Link Tue Jun 12, 2012
yes !

I have in 3 family in Bensonhurst soon to go for Sale.

Robert Gross
Skyline Group Real Estate
718.614.1066
0 votes Thank Flag Link Thu May 17, 2012
Dear gretel6817:

Yes they are out there but they are also far and few between. This is because most homeowners want to either rent or sell but not both. Sometimes if I house is sitting on the market a long time the homeowner may consider renting with an option to buy.

Either way, if you have the ability to purchase now you would probably be better off just purchasing now. If you have verifiable income, decent credit and 3.5% to put down, you probably can get a mortgage. You can potentially own for less than what the rent would be especially taking into consideration that home ownership gives you a big write off on your income taxes!

If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Thu May 17, 2012
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