The Rent To Own Program Details – How Does It Work
This is the number one question we get, so this page is here to explain how the program works.
IMPORTANT: In order for us to assist you with Rent to Own homes you MUST sign up for the FREE program. Again there is no cost for the program, but you MUST promise you have read this entire document.
Before we get to how the program works, let’s answer a few frequently asked questions.
Q. What’s the difference between “Rent to Own” and “Owner Finance”?
A. Not much. Both give you a way to get into a home you own (or will own) without having to go through a bank and get a traditional mortgage.
- Rent-to-Own (sometimes referred to as Lease-Option) homes give you the opportunity to move-in to the home as a renter, we negotiate up front a price at which you will buy the home at a later date and where a portion of your monthly rent goes toward that price. This gives you the opportunity to work on your credit and then get a traditional mortgage to buy the home when you are able.
- Owner-Finance. This is as it’s name would suggest. Instead of going to a bank to get a mortgage the current owner will act as the bank and take monthly payments. You are the owner of the home from day 1.
Q. I’ve had a bad experience (or heard horror stories) where I lost the home after making payments. Can this happen in your program?
A. Not as long as you make your payments on time, or work it out with the owner in writing. We do everyting legally, using attorneys to create and file the paperwork with the county so everything is done correctly and legally binding.
Now about the program…
First, let’s be honest with each other. This website lists a lot of homes that have a rent-to-own, or owner finance component to the financing options. However, we always tell everyone we talk to about rent to own homes that:
- If they are showing on the webite, they are still available.
- No matter what your situation is Rent to Own is an option
However, Rent-to-Own is NEVER the best option, financially speaking, and should not be used as your first option. Because the owner is acting as the bank and taking payments the interest rate is often double or triple (8-15%) common interest rates of mortgages today. Also, because the owner is willing to offer rent to own they have the upper hand when it comes to negotiating price and expect top dollar on the price of the home. For this reason you should exhaust all other options before considering rent to own.
The Good News…
There is a lot of misinformation out there about what it takes to get financed through a bank. You probably qualify and don’t think you do. Even if not, don’t worry, we’re still here to help, so keep reading. Here’s the real scoop of what it takes to get a mortgage in 2014.
- A FICO credit score of 580 or higher.
- ½% – 3.5% down payment. This can be as little as $850 on a $170,000 home.
- Bankruptcy: You can actually get a FHA mortgage while in Chapter 13 showing good timely payments toward the bankruptcy or 1 year after discharge. Chapter 7 requires 2 years after discharge. NOT 7 years like most people think.
- Previous Foreclosures: You can actually get a FHA mortgage immediately if you can show extenuating circumstances. If not the waiting period is 3 years.
- Must be current on any federal debt, ie. tax liens and student-loans.
- Any judgement will need to be paid in full.
Know your FICO…
No matter where we go from here, you are going to need to know what your FICO credit score is. Before you get all bent out of shape, rent to own homes do not rely on your fico, but to know how to best aproach a home owner about rent to own we need to know where your coming from. It’s important so, please, do it now. Using neither of the below methods will affect your credit. Checking your own credit is not the same as applying for credit somewhere.
- Cheap Option – Think Credit Reports This will cost you $0 which is worth it. After 7 days they will charge 29.95/mo for credit monitoring, it’s a good idea to have it at least until the home buying process is done, but if you don’t want to pay it, you can cancel any time during the 7 days and they don’t give you a hassle about it.
- Free Option – CreditKarma.com This is a free, but not as reliable. No credit card required. Ever.
Where do we go from here?
Now that you know what your FICO is, click the following option that best applies to your situation.
- You have at least a 580 fico and all other lending requirements metioned above…
- No need to register for the rent to own program, click here to apply for a mortgage and save yourself a boatload of money.
- You are just a little short of the 580 FICO (540 and above) and you meet all other lending requirements metioned above…
- The Rent-To-Own program is probably right for you, click here to register.
- Your FICO is below 540, or you have a recent bankruptcy, foreclosure, judgement, lien or behind on federal debt.
- The Rent-To-Own program is definitely right for you, click here to register