I have entered into a rent to own contract for one year. The base purchase price of the home is $147K, $650 a month out of the $1000 monthly rent goes into the house, in addition to the $1000 security deposit. This makes my total "payment" into the house at $8800. When I purchase the home I am curious about how the lender will view the contract. Both myself and the landlord would love to keep the purchase price at $147K and use the $8800 as the earnest money. My loan amount that I would request would be $138,200.
Has anyone financed a deal similar to this before? Is this something that a lender would do? Or will they require that the $8800 be applied towards the purchase price which would make it $138,200?
It will likely depend on how title is held, if title is currently in your name the lender would treat it as a refinance from a private loan. If the property is in the seller/landlords name, I would think that it will depend on the lender. For example if you would qualify for $200,000 and are only asking for $138,000 some lenders might not have as much of a problem as they would if you were only qualified for $138,000. In general ask the lender you would like to use, if they don't give you an answer you like, shop around and ask other possible lenders, if nobody can give you an answer that works for your situation, then you will probably have to alter your situation.
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