Congrats on thinking outside the box and looking into a Rent-to-Own/Lease Purchase. Just keep in mind that many real estate agents are not sufficiently knowledgeable when it comes to doing Rent-to-Own/Lease Purchase transactions. They are typically a "list a home"â€¦wait for a buyerâ€¦.waitâ€¦waitâ€¦.then hand the buyer over to his/her mortgage people while praying that they meet the lenders guidelines.
An agent who ACTUALLY knows and HAS EXPERIENCE with MULTIPLE lease purchase transactions is worth their weight in gold. Many times they end up being an investor themselves. That should be the FIRST question you ask of the agentâ€¦.How many successful lease option transactions have you completed? And don't take the, "Ohâ€¦wellâ€¦.I'm sure we can put something together to help you out." That equals a Red Flag as far as I'm concerned.
Since you said your credit is awfulâ€¦â€¦.finding a credit improvement company or doing credit repair is ESSENTIAL if you want to be a serious lease purchase candidate. DO NOT put it off! We've seen too many times were a potential tenant/buyer gets into the homeâ€¦then a few weeks go byâ€¦then a few months go byâ€¦.then before you know it, the 12 months have come & gone and they didn't do the work necessary to put themselves and their credit in a position to be ready for traditional financing (a mortgage).
You can check out some of my blog posts on Rent-to-Own/Lease purchase information but the key is to educate yourself as much as possible so you can ask the agent the best questions possible.
Thank you for your question, we have a sister real estate agency that works exclusively with Lease to Owns in the Columbus area. They take care of all of these situations for us and do an incredible job. I would be happy to have our lead team contact you and I would help faciliate this process with you as well. Please contact me know if my team can be of help. 614-282-1544
Better Homes and Gardens Real Estate
Rent to own is probably not what you expect. In this type of transaction the underlying assumption is the seller will be able to perform in addition to the tenant/buyer. Be careful putting up any large sum on a rent-to-own, most buyers and sellers are under the impression whatever deal they put together will be accepted by any lender when it comes time to actually purchase a home, not true. The mortgage underwriting guidelines are very specific and an underwriter may not agree with the terms on your original lease option. You may think all or part of the rent paid goes to down payment, not necessarily how it works when it comes time to get a mortgage and close the deal.
There is a lot of information on the link below. I hope my observations keep you away from harm, good luck.
NMLS # 6395
Financing Kentucky One Home at a Time