None of the above.
Lease/Purchase is basically outlawed in Texas. Just too many people who would take the buyer's money.
You still see signs and ads, but there are people out there still trying to beat the system on the seller/owner side. If you really think you want to do this, make sure you hire your own attorney to review any and all contracts BEFORE you sign. This might cost $300-$500 for you, but will likely save you lots of cash now and down the road...as well as save you heartache and heartburn in the future.
With the new SAFE Act....owner financing is pretty much gone too.
Best thing to do is rent below your means. I mean rent as cheap as you can stand and save up a big down payment. Wait the two years. Pay everything on time and pay down all credit. Get a secured card and just charge a little on it each month. Maybe gas. Absolutely pay it off each and every month. In two years hopefully you can put down 20% of the purchase price and obtain real financing. Everything is changing, but that's likely a great situation for you to be in and optomistic for a lender too.
Take Dave Ramsey's Financial Peace University in the meantime and this will help you get on the right track, saving for a rainy day fund, budgeting, and saving for down payment and retirement.
The worst questions we get here on Trulia and bad situations we see are 2 or 10 or 20 years down the road. There was just a posting here recently about a buyer of an owner financed property losing her $20,000 down payment and a good number of years payments.
There are legitimate situations with owner financing and lease to own, but be very very careful and make sure your own attorney looks over everything. Don't fall for using the seller's attorney or that all documents were created by an attorney. Make sure the attorney YOU are paying to advise YOU looks over everything.
Keller Williams Realty
Real Estate Consultant
3xUS Army Veteran
As most of the time the owner does not care for the credit score of the borrower AND you also get to know very well in side out the property as u live in it for couple of months already.
One more imp thing is that if you nego it right, some times you might be able to roll in some of the rent as down payment for the house. Talk to the owner/investor.
SInce you state:
......"Lease/Purchase is basically outlawed in Texas. Just too many people who would take the buyer's money. You still see signs and ads, but there are people out there still trying to beat the system on the seller/owner side."......
Can you answer how my Associate in Dallas/Ft. Worth with the knowledge of his Attorney have been doing hundreds of Lease Purchase deals over the last 5 years and have built a successful and trustworthy business doing just that? To my knowledge, my Associate has not been arrested and he's not in jail, (unless the call I received just the other day from him was his one and only call from his jail cell) :)
It's just another way the "government" & "bankers" are trying to get into everyone else's business. Even when I went to my Attorney or Banker, MYSELF AND MY ASSOCIATE, HAD TO EXPLAIN TO THEM HOW TO COMPLETE A DEAL. Is it my mind playing tricks on me or wasn't it partially the government & banking communities fault that caused the whole real estate mess. And we are suppose to believe by MORE regulation, these same people will make things better? If you believe that.....I have some nice swamp land in Texas or Florida I'd like to sell. (My take)
Don......I would LOVE for Mr. Bruce Lynn to clarify that point you made. **2 thumbs up for you**
I do, however begrudgingly, have to agree with Mr. Lynn that all people should have their own attorney look over any paperwork before signing it.
Questioning the Government with Boldness
Never afraid of the "Real Estate Police"
However, I'm not so sure about his interpretation of the SAFE Act. For instance, the HUD web site states: "The commercial context implied by the taking of an "application" is also absent where an individual seller provides financing to a buyer pursuant to the sale of the seller's own residence. The frequency with which a particular seller provides financing is so limited that HUD's view is that Congress did not intend to require such sellers to obtain loan originator licenses." See http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm
Bruce: If you can clarify that, I'd appreciate it.
But, Nancy, I'd agree with Bruce that the combination of restrictions in Texas and your own situation really suggest that the best course of action is to rent, save your money, clean up your credit, and then buy.
Hope that helps.