pbackus1, Renter in Saint Louis, MO

Very eager to buy my first home and looking into a lease purchase option. I am working on my credit currently but need help. Any suggestions?

Asked by pbackus1, Saint Louis, MO Wed Nov 28, 2012

Help the community by answering this question:

Answers

5
OK, first and foremost I DO NOT recommend a lease purchase and in the St Louis area we DO NOT do lease options. The difference between the two is with a lease option, you lease a home and at set intervals you have the option to buy or not to buy, but the seller can't sell to anyone else while the lease option is in effect. With a lease purchase, you have a lease contract for X amount of time and a legally binding purchase contract that has you purchasing the home at the point that the lease ends.

95% of the lease purchases never close. Whatever was preventing the buyer from buying initially is typically still an issue. Even if the buyer has done all the right things (improved credit, etc) I have seen the mortgage rules change so they still couldn't get a loan. Then the seller has a tenant in the home with tenant rights and they have to get the tenant out, fix the home up again and put it back on the market so they can find a buyer since typically they really don't want to be a landlord, they want to sell the home.

When a lease purchase is done correctly, all the inspections are done and paid for upfront (the buyer has money out of pocket for all the inspections), and any repairs the seller is going to make are all ready negotiated. BUT the appraisal cannot be done until right before closing, so the seller is left hanging since if the home doesn't appraise, the sales price has to be dropped or the contract ended and the majority of the time, it's ended since the seller doesn't want to sell for the lower price. Again, the tenant/buyer is still in the home with tenant rights and the seller has to get them out, fix up the home and put the home back on the market.

On the buyer side, the only sellers desperate enough to put themselves in a lease purchase situation typically have a home that has issues and they have been unable to sell it any other way. That means that you have a very small selection of homes to chose from and they all have issues, many of which will require additional funds from you to correct down the road. If instead you wait until you have corrected your credit and have built up a downpayment, you will have a greater selection of homes available to you that are in better condition.

You need to sit down and talk with the Better Family LIfe, Beyond Housing or NECAC HUD counselors. They can advise you on correcting your financial issues and they will be able to put you in special programs that will allow you to be given State and Federal monies to help with your downpayment once you complete their program. 314-533-0600 is the number for Beyond Housing. Call them - they are your best resource to help you get to your goal of buying a home. Once you have completed their program, give me a call and I will help you find the right home.
1 vote Thank Flag Link Wed Nov 28, 2012
Thank you for the advise. I have actually completed the training couse that I needed to get funds from beyond housing for down payment assistance. I just need help in regards to how do I proceed from here.
Flag Wed Nov 28, 2012
If you are not working with a Bank, it's better to go ahead and sit down with a lender and tell them your plans. Most times it's better to work with your own Bank, because they know your history. I have several clients who have come to me with less than stellar credit/scores, who I have sent to a loan officer with whom I routinely work. She has given them a formula to follow, that teaches people the best way to pay down debt and repair credit. It's not something one normally knows how to do. For instance, someone can start paying down this bill when it's another one that affects your credit more and they can give you that guidance. Hope this helps and good luck. ,

0 votes•Reply•Flag•Link• Delete•A moment ago.










.





Contact.







Marinka Nekic, Agent, Saint Louis County, MO

Have you looked in NACA program. It is not credit score based
0 votes Thank Flag Link Wed Nov 28, 2012
If you are not working with a Bank, it's better to go ahead and sit down with a lender and tell them your plans. Most times it's better to work with your own Bank, because they know your history. I have several clients who have come to me with less than stellar credit/scores, who I have sent to a loan officer with whom I routinely work. She has given them a formula to follow, that teaches people the best way to pay down debt and repair credit. It's not something one normally knows how to do. For instance, someone can start paying down this bill when it's another one that affects your credit more and they can give you that guidance. Hope this helps and good luck. ,
0 votes Thank Flag Link Wed Nov 28, 2012
Have you looked in NACA program. It is not credit score based loan program. No down payment or closing costs. Please go to http://www.naca.com. Let me know if you need help, I am a NACA real estate agent specialist. 314 756 6059
0 votes Thank Flag Link Wed Nov 28, 2012
Good afternoon Marinka,
I am actually registered with NACA. How does their program work? Is there a certain time frame you must live in the home. If you ever decide that you would like to sell is that an option. Please advise thank you.
Flag Wed Nov 28, 2012
pbackus1,
I suggest that you get with a mortgage banker to obtain a "look ahead / what if" pre-qualification analysis to get an understanding of what you will be able to afford at some date projected into the future after your credit score and other mortgage obtaining factors come into balance insofar as "qualification" is concerned. That will put a parameter (upper limit) on your future purchase price capacity and define for you what price house in the lease-purchase market you need to be looking for either by yourself or (recommended) with an agent. Hope this helps. Good luck. Let me know if I can further explain my suggestions.
http://www.mystlouisagent.com/welcome-to-my-st-louis-agent/t…
0 votes Thank Flag Link Wed Nov 28, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer