Rent to Own allow a part of your rent each month to go towards the down payment and/or purchase of your home. Before getting into a contract on the home, you should get with a mortgage broker and let him/her run your credit and to make sure you can you get a loan in a years time and what do you need to do to make it happen.
Depending upon the lender you will need at least 12 months of cancelled checks to get into a cashout refinance loan based upon the annual appraised value as opposed to the stated value in the option section.
If you enter into a land contract most lenders will treat this as a refinance and may even allow you to take cash out when you refinance the home into your name.
When you are renting to own a home it is extremely important to keep documentation and proof of your monthly rent payments. Don't pay in cash. If you don't have a checking account, pay your monthly payment with a money order. Make it a priority to have documented and proof of your monthly payments.
It is extremely important that you address any credit issues you may have so you are in a position to close on your home in the future. Contact your mortgage professional before making any major purchases or changing employment while you are in a rent to own option.
A lease-to-own basically gives the buyer the option to own the property within an agreed upon period of time, usually 1 to 3 years.
There is typically an “option fee” of anywhere between 1 to 5%, usually added to the purchase price.
Talk with your mortgage pro to see if this option fits your goals.
Or feel free to call us at 888-418-4467 with any questions.
What is the difference between a land contract and a regular lease to own