Home Buying in 50401>Question Details

Heather Sonk…, Home Buyer in Mason City, IA

are lease purchase options safe for buyers?

Asked by Heather Sonksen Jones, Mason City, IA Fri Sep 13, 2013

Help the community by answering this question:


No they are not safe. They can work, but you can also lose your shirt as well as the house if you can't get a loan and if the house does not appraise for what you agreed to pay a year ago when you did your contract. Avoid rent to own. While you are renting the owner can stop paying the mortgage and the bank can foreclose and out you go. It's not safe. Just rent and buy when you really can.
1 vote Thank Flag Link Fri Sep 13, 2013
The home's original market value is $106K, appraised value of $96K and asking price of $86K. The money we will be putting into it will be down payment, so loan amount would be under $80K. I am meeting with a banker on Tuesday to get a game plan on obtaining a loan before I sign anything. This is being done with the help of an attorney and the two realtors - no investors involved. I have done some research and find pros and cons from most people. The problem we're having renting is that rent is WAY higher than a mortgage and I'm living 13 miles from work in a home that's fueled by LP gas. Not to mention we're in a town without a gas station or store or anything else, so we have to drive 26 miles to do anything. So by doing this option, we're saving over $200 per month on daily expenses.
Flag Sat Sep 14, 2013
Keep in mind that rent to own can be risky and one could stand to lose a bit of money, therefore do inform yourself well, and consider consulting with an attorney who specializes in real estate beforehand. If you haven't done so yet, visit with any licensed loan officer, see if you can buy outright...
1 vote Thank Flag Link Fri Sep 13, 2013
I'm about 40 point (credit score) from obtaining an FHA loan. I'm working with a realtor and will have attorney look over contract. $2000 deposit (non-refundable) will go towards down payment at end of lease, along with an additional $5000 that we already will have. Rent is low and seller will pay closing costs.
Flag Fri Sep 13, 2013
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