Many people are now having trouble securing a mortgage to buy a new home due to the recent financial crisis and the new stricter rules for obtaining a loan. Banks and other lenders are now being a lot more strict on who they will give a mortgage to. However, with a bit of creativity, there are ways to become a home owner without the traditional mortgage. One option is to locate a seller that is open to a lease-to-own option on the home they are selling.
A lease to own option means the seller/landlord and the renter/prospective buyer reach an agreement. This agreement is written in a legal contract that both parties agree upon prior to the deal being done; this includes the sale price of the home. The bottom line is the renter agrees to buy the home in an agreed upon time frame (five years, for example), and the landlord agrees to put a portion of the rent payment toward the agreed sales price of the home (two hundred dollars). This deal allows the renter to be paying against the loan prior to actually buying the home.
In the event that the renter chooses to not buy the home, the owner of the home keeps this money that would have gone to paying down on the agreed upon price. If the renter decides to buy, he or she will be responsible to get a mortgage for the agreed upon price minus moneys paid toward the price of the home in the monthly rent. A lease to own option allows people with not the best credit to live the American dream of owning a home.
Related posts:
- Leasing Your Home
- Poor Credit Help with Home Leasing
- Commercial Real Estate Leasing
- Commercial Real Estate ? From Leasing To Owning
- Renting A Home That?s In Foreclosure
Source: http://www.realestatebriefings.com/renting-leasing/leasing-own-beating-banks/
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