Home Buying in Bloomfield>Question Details

Peaches, Home Buyer in Bloomfield, NJ

Can anyone help me find a rent to own home in NJ? I really wish I could buy a house but I can not at this time due to my poor credit score.

Asked by Peaches, Bloomfield, NJ Mon Jul 19, 2010

I am working on improving my credit score but also heard about rent to buy options.
Most counties in NJ will be considered.

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Answers

12
Good afternoon Peaches,

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!
3 votes Thank Flag Link Tue May 7, 2013
that was the best answer
Flag Thu Sep 5, 2013
Peaches,

I'm back again and just wanted to clarify that there used to be a distinction between a rent to own lease-option arrangement and a lease-purchase deal. Lease-option means that at the end of the lease term, renters do NOT have to buy the house.

Under the rent to own lease purchase deal renters are obligated to BUY it. Many people, including agents, now use the terms interchangeably, which is why I mentioned both in my first answer, so be clear on what lease and/or contract you sign and exactly what it is you are looking to do.


Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cell
973-575-6353 ext 17
Gina@GinaChiricoRealEstate.com
2 votes Thank Flag Link Thu Jul 22, 2010
Just so you know, "rent to own" isn't the same thing as buying.

When you "rent to own," you pretty much are just paying for an option to buy.

If you've got credit problems, the best thing you can do is rehab your credit. One way to do this is to rent something more modest than you can afford, not paying a premium for an option you may not be able to take advantage of.

So. Rehab credit, save a few dollars, then buy. OK?

All the best,
2 votes Thank Flag Link Wed Jul 21, 2010
Doing rent to own is all about a proper plan, or it may not be the best scenario for you. If you can't buy now, you will need a lender to explain what would need to be fixed or improved regarding your situation to buy and then what would be the loan amount in theory that could be obtained. Once you know that, you will want to work with an agent who is experienced in Rent to Own.Once you have the appropriate Realtor to help you, I would back your scenario into an appropriate home that is being offered for rent. Then, even though a landlord may not be offering a rent to own scenario, make the offer anyway. You would be surprised at how many Landlords are willing to do this. I would also make the same offer to vacant homes listed for sale, as those sellers often will be open to that scenario as well. I might also recommend the use of an attorney who has a lot of experience with lease options, as the contracts and lease need to be done carefully to protect your rights and maximize the benefit for you. I hope that helps. Feel free to contact me, as I have done lease options on my own rentals and have successfully created a few homeowners through the years, so I am always happy to offer you additional guidance.
2 votes Thank Flag Link Mon Jul 19, 2010
Hello Ian I am very much interested in speaking with you about helping me obtain a rent to own home or otherwise known as a land contract. my email is goldenshepardnailpolish@aol.com. my name is Michael
Flag Wed Sep 18, 2013
If you need help raising your credit scores to qualify for Loans, Credit Cards or Mortgages.
We can raise credit scores dramatically in only 3-4 weeks so to help you qualify

For Over 5yrs We've been working with Mortgage Brokers, Real Estate Agents, Car Dealers and others throughout the USA..

Hope this helps..

Rich Smith
IzmCreditServices.net
(702) 758-3799
0 votes Thank Flag Link Tue Mar 3, 2015
My credit score even though I am working on it is not up to par- I am looking in the area of Bordentown, Florence, NJ, possiblbly Lawrenceville, NJ
0 votes Thank Flag Link Wed Feb 25, 2015
Rent with an option includes an amount you pay that gives the option to buy at the end of the lease at the price that was determined at the beginning of the term of the lease. The advantage to the seller is that the seller gets to keep that option no matter what. The advantage to the tenant/buyer is that in a market where prices are increasing, they get to fix the price at the beginning of the lease. However, if interest rates increase too, the buyer may not find this such a great deal. The realtor in this case can help to advise on offer price, rental price and get information from the landlord/seller as to his/her wants. But the actual contract is written up by your attorney. There is a lot to consider before entering into this kind of contract.
0 votes Thank Flag Link Sat Aug 24, 2013
correct my location it's woodbury nj
0 votes Thank Flag Link Mon May 6, 2013
i have beenworking too improve my credit my x wife messed up for me no we are devorced it has been so hard too buy anything on credit right now i am looking too buy a senior citizens home for me too live in for the rest of my life. please respond too me by calling 410-920-9302 angelo vitalone sr avsr1877@comcast.net
0 votes Thank Flag Link Mon May 6, 2013
Peaches,

With a poor credit score, options may be limited due to the fact that most landlords, if not all landlords, require a credit report. With that being said, I have seen quite a few landlords rent to someone with a lower credit score. Unlike lenders when buying a home, its solely up to the landlords discretion to rent the property to you without worrying about underwriters, approvals, etc.

With that being said, there's two ways rent to buy options can be proposed. One, where you rent for a certain amount of time and then have the "first option" to buy it at the end -- No harm, no foul. Unless typically spelled out, no amount of the rent is going towards a down payment. If there is a certain amount going towards the down payment, I would have a lawyer write up the contract to protect both sides of the deal, like if buyers opt to not buy - do you get your money back that went towards the deposit??

In another scenario, you and the seller can agree on the price of sale now. You would rent with monies going towards the downpayment and next year you would buy it at the price agreed upon. With that scenario, you are buying the property at today's value. Is that good for the buyer? Not always -- what if the market declines? You've overpaid for the property. If the property value rises, you made out however the seller isn't getting the current market value of what the home is worth on the day you buy it. Its a gamble on both sides and should be seriously thought through and both parties should have attorney representation.

Depending on how long you want to live in the property, the terms of lease are extremely important as are the terms of the "rent to own".

If I can be of further assistance, please do not hesitate to reach out for me directly.

Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cell
973-575-6353 ext 17
Gina@GinaChiricoRealEstate.com
0 votes Thank Flag Link Wed Jul 21, 2010
To be a desireable tenant you need a good credit score. If it is good enough for a landlord, the strategy below could work. To obtain a loan when ready to buy you need the good credit. Maybe by that time (months from now), your score improves to be a buyer. I suggest that you complete a rental application and start there with an agent.
0 votes Thank Flag Link Mon Jul 19, 2010
Here's a link to a blog I wrote on how to find rent-to-own/lease-option properties:
http://www.trulia.com/blog/don_tepper/2010/03/how_you_can_fi…

Hope that helps.
0 votes Thank Flag Link Mon Jul 19, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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