Johnny, I just posted this answer on a similar question. Iâ€™ll be passing through your neck of the woods soon, will wave.
Most, not all people seek a lease option because they do not qualify for traditional financing. By trying to work around the system that is in place to protect them the level of risk and probability of failure increases dramatically. Not one â€œlease option buyerâ€ I have ever spoken to understands the transaction nor have I ever provided an end loan to convert anyone to a traditional mortgage from one of these puppies. The desire for home ownership is almost an obsession in our country, driving people to take unwarranted risks.
Most of the people that are trying to use this type of transaction to circumvent the traditional process have asked a loan officer how long it will take to be eligible for a regular mortgage. The LO always gives the best case scenario with the shortest timeline. Whatever timeline you were given, double that and then add 6 months to a year to that number, only then do you have a safe and realistic target date.
Yesterday a LO in my office was asking for help trying to sort out a poorly written lease option. The buyer and seller agreed to use a portion of the rent for down payment, not automatically allowed when it comes time to arrange permanent financing, rent is rent, down payments are down payments. It doesnâ€™t matter what the parties agree to, the lender must follow the underwriting guidelines.
Protect yourself and your money, research before you jump in, these transactions are not as simple nor are the regulated by the Feds like a mortgage, you are going in alone!!! Information in the link below may protect you from harm. Good luck,
NMLS # 6395
Financing Kentucky One Home at a Time