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Forums » Rent to Own a.k.a. Lease Purchase, Lease Options » Lease Option Consideration/Fee Question

Lease Option Consideration/Fee Question Subscribe to Lease Option Consideration/Fee Question

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Brandon Anderson


Forum_avatar_avatar-refreshhomes

Nov 11 '07, 07:48 AM

How will a tenant-buyer be able to afford an option consideration/fee of 3-5% of the selling price if they are not financially well off enough to qualify for a mortgage? One would think that if a person could afford a cash option fee of $10,000 on a $200,000 house that s/he would be able to get a mortgage and use that $10,000 as a down payment.

Thanks for the insight.

Edited: 06/26/2010 at 04:15AM


Account Closed


Forum_avatar_avatar-rei

Nov 11 '07, 03:42 PM

You have not looked at the actual market. There are many people who have the cash but do not have the credit. Specific examples.

1. Ugly divorce where each side did things that destroyed the credit of the opposite. Later they person finds they are in a new relationship, they hold a good job, they save money but then events in the past hold back their credit.

2. After bankruptcy. Someone has a blow up. Maybe from a medical event. They have good income and savings but have a BK plus many write offs. They no longer owe the money but the credit score is low.

3. Cash based business person who never borrows money. Low credit score from few trade accounts but wads of cash (legal cash).

4. Immigrants. Manual labor or a high tech worker. Both can have significant cash reserves but not the ability to produce the needed documents plus 3 years of credit history in the US. Many friends who moved from the UK to the US fall into this.

John Corey

Edited: 06/26/2010 at 04:15AM


N/A N/A


Forum_avatar_avatar-gomex_funding

Nov 15 '07, 09:49 PM

oh wow, I did not see this forum. I worked for a company who did lease option housing and let me just say that-

Not charging an option deposit is asking for trouble! Yes there are people who have money saved away. We did a lease option for a younger girl once who had credit below our guidelines and marginal income because she had $23K she wanted to put as an option deposit. :shock:

It panned out for the company and so she was put on a 12 month lease option. She actually committed to fixing her credit and I believe she got financing last month.

Protect your time and get a deposit!

Edited: 06/26/2010 at 04:16AM




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