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Noreendavis, Home Buyer in Somerset, NJ

How do I find houses for sale with land contract or rent to own options?Because of credit issues I am

Asked by Noreendavis, Somerset, NJ Sat Jun 28, 2008

unable to finance a house by conventional methods. I am in the process of cleaning up my credit, but it will realistically be a couple years (depending on the lending institutions) before I can get a conventional motgage. I currently own a home that's been rented out for 2 years in anothe state (stable income), so I'd like to sell that one and buy around the same time. In the meantime, I have decided to look for a rent to own or land contract. I am looking for a small home (2 bed fine) in the Somerset area. I also make pretty good money and would like to see it going to an investment and not a landlord. I have a small down payment (5k) and would like the selling price to be below $240,000. If anyone can give me advice on where to find a house or townhome with this option or any other advice about land contracts, I would appreciate it.

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Answers

6
Hi,

Though I am not a Mortgage expert, However, first thing you need to know that Of your total rental income, the banks providing loan to you will consider 75% as your income which is a good thing.
Also, you can buy this home as a primary residence provided the new home you buy is larget than the existing home you own in another state.
Furthermore, with downpayment you mentioned and depending on your income, my advise is to go with FHA Loan where you need only 3.5% down.
I do not believe any banks provides conventional loan under 10% down. I can recommend some very good lending institutions to you.
There is still a lot to discuss. I strongly recommend to give me a call and I can discuss further or else I'll keep on typing for hours. My Cell# 732-277-9321.

Hope to talk to you soon,

Vishal Maher
Richa Realty
Cell# 732-277-9321.
0 votes Thank Flag Link Sun Feb 28, 2010
i have about 500 down and have four kids and am looking for a home in the country if possible.i am looking for a home in harrison county kentucky if possible.it needs to have at least 4 bed rooms.if you can help me out please do. i can aford about 400 per month.
0 votes Thank Flag Link Thu Dec 3, 2009
Just an update on the FHA loan answer, they do look at your credit score when the application is taken. My husbands credit score barely made us ineligible.
0 votes Thank Flag Link Tue Aug 11, 2009
Thanks for your responses. I didn't realize the term land contract (renting to own) wasn't that familiar in this area. It sounds like I may have a bit of a challenge finding a realtor in this area who can help me with it. I was already planning on hiring an attorney, if I found a home that fit the description. So I'm comfortable with that regard.

I didn't realize the info you provided on FHA mortgages. I'll also check that out and see where that takes me. But again, thank you both for your info.
Noreen
0 votes Thank Flag Link Tue Jul 1, 2008
Noreen,
Have you looked into FHA mortgages? You only need 3% down and they do not look at credit scores when issuing mortgage loans. I have heard that you do need to be current with your credit cards, though.

Regarding the rental property you own, you might want to consider doing a 1031 when you are ready to sell that or you could be faced with paying capital gains tax when you sell. However, to do a 1031, you have to follow the guidelines and purchase "like" properties. Meaning that if it has been a strictly investment property, you will not be able to purchase a primary residence and do a 1031 exchange.

To find rent to own properties in your area, contact a good realtor in your area. I'm not familiar with Somerset's MLS, but in my area, we can search properties with that criteria and notify clients when new ones come on the market.

I have not seen any sellers specifically looking to do a land contract, and that's probably because they are unaware they exist. Again, a good agent who is willing to do the work for you is your best bet. Find one who is familiar with land contracts to help you. They are very "pro-seller" and you can lose everything if you default on even one payment, so be careful! Be sure to have an attorney look over any contract to be sure you are protected.

Good luck
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Mon Jun 30, 2008
Hello Noreen,

You basically should hire a realtor. In addition to local MLS info a good realtor will have a datebase of investors/land owners who can assist you in achieving your goal. Trying to do this on your own is possible but will present some challenges. Find a good buyers agent who service your area.

Best Regards,

Jeremy S. Hill, Realtor
Keller Williams Realty
http://www.southnewjerseyhomes.com
1814 Route 70 East
Cherry Hill, NJ 08003
Office: 856.685.1651
Fax: 856.321.1414
Direct: 609.876.5817
"Your Interest 1st Always!"
0 votes Thank Flag Link Sat Jun 28, 2008
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