Keep renting while you fix your credit or whatever it is that is keeping you from buying now and when you qualify for a mortgage, even if it is 1-3 years from now, then buy. This market is not about to change very fast so you will still find decent deals.
If you do a recorded contract for deed the existing mortgage may be called due by the lender. An unrecorded version is not as protective. A true lease to own assumes financial stability of the seller, something that may not be the case. And I have seen some very poorly structured rent to own contracts where the tenant/buyer thought they were accumulating a down payment with all or part of the rent. Underwriting guidelines for getting a mortgage to complete the purchase do not match that scenario; they are very specific what part can and canâ€™t be counted towards the down payment. It doesnâ€™t matter what the buyer and seller agree to if it canâ€™t be approved for a loan when the time comes.
Get to the bottom of why you need a rent to own before making a move, create a plan to fix the problem, then stick to the plan. Double what ever time period you think is necessary to fix the problem, nothing goes as planned. Base your contract on the double time frame. Include your Realtor and their favorite loan officer throughout the process, not following this last suggestion really increases the odds of failure. You may need to pay your Realtor directly if your deposit is not substantial enough. Hope this is helpful.
I would be glad to show you how to make this work, but it has to be the right property and seller.
Like short sales and REOs, you need a Realtor who has the experience and knowledge to be certain you get a fair and balanced agreement.
a loan officer and I have several that can help you with downpayment or credit issues. The best time to buy
is now with low interest rates and reasonable priced homes Debbie Bergthold-Classic Real Estate
Definitely get an attorney involved. I personally have never done one of these & I deliberately stay away from this type of transaction.
Make sure your attorney is holding the deposit money and that interest is being accumulated and that all the terms of the rent to own are SPELLED OUT CLEARLY, leave no room for misunderstanding.