If you have suffered from financial setback, it can be hard to not get discouraged. You may feel that things that are important to you, like owning a home, are now out of your reach.
Through life, I’ve learned one of the worst things that you can do is let your situation define you. It is generally when you feel like you don’t have options that you make the worst decisions of all.
While you may not qualify for a mortgage today, there is no reason to give up on your dreams. If you are serious about owning a home, why not start moving in that direction now?
Even if a mortgage is not in your immediate future, you can find a lease option home. The good news for you is that with the changing real estate market, there are more lease with option to buy homes available. Sometimes you can even find new homes available as a lease with option to buy!
But what should you look for in lease or rent to own houses?
You can choose go through an individual or a program that offers lease to own homes. If you are fairly savvy when it comes to real estate and feel comfortable that you can protect yourself, dealing directly with the homeowner can save you some money.
On the other hand, if you would like an advocate who can guide you through the process, going with a company is a great idea. Look for a company that will do things that benefit YOU – like report to your credit, verify that the home is not in foreclosure and verify that the mortgage is current.
Once you have decided that a rent to own home is in your future, you will need to do several things. The first is to begin to save for your down payment. Most homes will require somewhere between 2-5% in a non-refundable option fee. This fee will be credited to you at the time of closing in addition to a portion of your monthly payment in the form of a rent credit.
If you are serious about owning the home but don’t have the funds, you need to act fast! Until April 30, you may be able to qualify for the first time homebuyer’s tax credit, which can assist with a portion of your down payment. Just be careful – the contracts need to be worded properly so that they represent a sale in the eyes of the IRS. If they are not, you could be in violation of the law. As an example, a lease option or lease purchase does not qualify as a sale. On the other hand, owner financed homes do.
Once you have saved for your down payment, you will need to search for lease option to buy homes. You can do this by searching rent to own home listings or lease option listings on the internet. If you can’t find the perfect home, don’t worry! There are several companies out there that offer a HomeFinder program that can help you locate a home nationwide. (Like ours!)
Once you have found the perfect rent to own home listing, the next step will be to secure a contract. Before you do this, you will need to turn your attention to your credit situation.
If you are not serious about the credit restoration process, it is likely you will never achieve your dream of home ownership. Credit repair takes time and you need to consider this at the time that you structure your contract. If a seller is looking to only do a 12 month contract, it is likely that they don’t have your best interest at hard. For most people, it will take a minimum of 24 months to repair their credit so that they can qualify for a mortgage.
If you don’t qualify for a mortgage, finding rent to own homes can be a great alternative to help you achieve your dreams
