BiggerPockets

Go For a Lease Purchase Home Option

Wednesday, May 04

Lease purchase options are a popular choice for those that want to get involved in the purchase of their first home but aren’t quite ready to buy outright. Perhaps they have no down payment saved up yet or their credit needs repair before they ask for a loan. Some who have recently had a foreclosure are ready to start over and are anxious to become homeowners once again. A lease purchase option could be the solution for all of those situations and more.

A general explanation of this type home purchase is that it is somewhere between renting and buying. Usually a real estate wholesaler has homes for sale that he or she has purchased and wants to sell. The market is very difficult today for sellers, so this offers a solution that may work for both seller and buyer.

You will find a house you like that is offered for lease option or lease purchase. Sometimes these are also referred to as rent-to-own. You sign a contract that states your rental amount and how much of your rent will be put aside to act as a down payment when you are ready to finance the purchase of the house. You must pay the rent amount every month, and in the meantime you should work on your credit to improve your credit score. The idea of lease purchase is to move you toward home ownership.

You’ll need to agree on a time that you will obtain a loan from a lender, which will pay off the seller/investor and you will transition to a full home ownership situation. Given the circumstances you will have by then improved your credit score so you can get a loan and a decent interest rate. The better your credit the better interest rate you will qualify for. That’s the best reason to improve your credit score.

The down payment will come from the excess rent amount you were paying during the lease purchase time period. You will go to the lender with improved credit history, solid payment of your lease purchase agreement, on time utility bill payments, and a down payment. Make sure you also have solid jobs that you have had for a year or more. Lenders are unimpressed by flaky employees that change jobs every couple of months and see them as risky. That means higher interest rates or no loan approval.

SCHomeSellers.com Rent to Own and Lease Options on Homes For Sale in South Carolina!

You can view all our available properties at Available Homes for Sale and Rent to Own and if you would like to pre-qualify for one of our rent to own homes please complete our online confidential Home Buyer Questionnaire and start to enjoying a home owning by renting to own or lease option!

When renting to own one of our homes in the Charleston SC area, even those with less than perfect credit can qualify!

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