Lease/Purchase never benefits the buyer.
Deposit is typically much higher on such transactions and will be forfeited if you can't purchase.
There is no way of knowing if your credit, income and debt to income ratio will be sufficient to get you approved for a mortgage by the time your purchase contract kicks in.
Find yourself a rental property; get in touch with a mortgage consultant who will be able to tell you what exactly needs to be done with your credit to get you qualified for a loan.
Veronika Barash, RealtorÂ®,
CERTIFIED SKILLED NEGOTIATOR
REO & SHORT SALE CERTIFIED
CERTIFIED MARKETING SPECIALIST
Keller Williams Realty Consultants
If you are not financially sound now, you risk a lot by entering into a "lease with the option to buy" arrangement.
One risk is ....you stand to lose any upfront deposit money if you cannot complete the purchase for any reason.
You may be asked to pay an amount of rent over and above the normal rent, which would be applied to the purchase........but.......... you will also lose that if you don't buy the home.
There are a lot of pitfalls - make sure you really understand what you are getting involved in .
Talk to a mortgage rep - get your finances in order...then, when the time is right - buy a home in the usual fashion.
I do not suggest doing lease purchases. There are simply way too many things that can go wrong with one from either side.
In order to do true owner financing, the owner must own the property free and clear of any mortgages. Very few sellers are going to be in that position.
If the property currently has a mortgage on it, the owner cannot legally transfer the title to a buyer without the mortgage first being paid in full. Most all mortgage loans have a due on sale clause. This due on sale clause requires that the mortgage be paid in full should a title transfer occur.
The buyer is also at great risk on a lease purchase transaction should the seller quit making their mortgage payments. Right now, many sellers cannot afford to make their mortgage payments or simply chose not to continue making them. I have seen where the buyer is making their rent payment, but then the owner is not paying the mortgage. The next thing the buyer knows is that the home is in foreclosure. That means the buyer will generally not get back any of the money they have given as earnest money or security deposits.
It is also a big risk on the buyer. If your credit is not where it needs to be now, there is no possible way of you knowing it will be acceptable in a set amount of time.
Before entering into any type of agreement like that, the buyer needs to make sure that they fully understand the potential pitfalls that could arise. Should the seller default on the mortgage, the buyer could lose ALL of the money that they have invested. Until you are able to purchase, renting is generally the safer option.
Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options to see if purchasing might be a possibility for you. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.
Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePathÂ® | HomePathÂ® Renovation | HomeStyleÂ® Renovation | VA | USDA | GA Dream | Jumbo Financing.