|
Buyers F.A.Q.'s What is a Lease Option? How do you qualify for a Lease Option? Why should I Lease Option? What are the benefits of Lease Options? Does your site offer anything other then Lease Options? How do I find a home that meets my needs? How much should I put down? What kind of payments should I expect? What is the difference between finding a home and the Platinum Program? How do I fix my credit? How long does it take to move into a Lease Option? Answers What is a Lease Option? A lease containing an option giving the lessee the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period.
A Lease Option (Lease with Option to Purchase) can have several names, including, but not limited to Lease Purchase, Lease Option to Purchase or Lease to Own. Some think Rent to Own or Owner Financing are also forms of Lease Option, but these are two different forms of purchases and you should always seek legal advise before entering into any form of purchase unless you are represented by a Real Estate Agent. Typically, you find a property in which you put money down (Option) in order to set a purchase price for a later time, anywhere between one to five years, though some may be sooner or allow more time. Two years is standard and is most of the time long enough to allow the lessee to improve their credit or circumstances that are keeping them from purchasing a home today. How do you qualify for a Lease Option? Qualifying for a Lease Option depends on the sellers criteria. Usually you are required to put anywhere between one to five percent down and pass a background check. A proven stable job is preferred also. Credit is not an issue since you can usually work on cleaning up your credit over the time of the lease. That is one of the biggest reasons in which people use Lease Option; set a price on a future purchase and take the time within the terms to clean credit and take care of any obstacles currently holding them back from obtaining the financing they would otherwise need to purchase the home today. Why should I Lease Option? A Lease Option can benefit you in many ways. One reason is that you get to set a future purchase price that the seller must commit to. This could be very beneficial depending on the length of the term and the growth of equity within that term. A Lease Option will also use a portion of your payment towards the purchase price in addition to the initial Down Payment, or "Option". Another benefit is that lenders will use your proof of timely payments to determine the Loan to Value when the time comes to purchase your home. The loan would then be considered a refinance and depending on how much equity you have gained, you may be able to pull cash out or get a more favorable loan based on the actual value and not the purchase price. What are the benefits of Lease Options? A Lease Option can benefit you in many ways. One reason is that you get to set a future purchase price that the seller must commit to. This could be very beneficial depending on the length of the term and the growth of equity within that term. A Lease Option will also use a portion of your payment towards the purchase price in addition to the initial Down Payment, or "Option". Another benefit is that lenders will use your proof of timely payments to determine the Loan to Value when the time comes to purchase your home. The loan would then be considered a refinance and depending on how much equity you have gained, you may be able to pull cash out or get a more favorable loan based on the actual value and not the purchase price. Does your site offer anything other then Lease Options? Our site mostly deals with Lease Options, or Lease with Option to Purchase, however you may find some sellers who will agree to owner financing, rent to own, sub lease options, owner carry seconds, or land sales contract. You may even be able to offer to purchase a home today if you are able to.
How do I find a home that meets my needs?
There are two option that Lease Option offers. First we recommend searching our homes for a home that suits your wants and needs. If there is no such home available, you can e-mail us and we will search for you. If we are unable to find a seller interested in selling their home for lease option, you can apply for our Platinum Program as long as you meet the initial requirements. See Platinum Program.
How much should I put down?
Sellers usually require anywhere from one to five percent of the purchase price. This is applied toward the purchase price when the Lease Option is exercised. Lease Option Group™ suggests a minimum of $2,000, but we have seen some homeowners who will allow you to move in with only first and last months payment. Remember, the more you put down, the more you can negotiate purchase price and payments.
What kind of payments should I expect?
This will obviously depend on the purchase price. Other factors that will also effect the monthly payment include monthly taxes, insurance, home owners association dues (if any). One consideration that the seller makes in determining the payment is the amount of the "Option", or Down Payment. The larger the down payment is can allow the seller to lower the monthly payments in order to make it more affordable. One thing that you should not expect if you can only put down a small down payment, is the monthly payment to be that of normal rents in the area. The reason sellers Lease Option their homes rather then renting is the comfort of knowing someone is taking care of the home as they would their own and the potential sale of that home. Otherwise, it would just be a rental.
What is the difference between finding a home and the Platinum Program?
Though we have homes that you can lease option currently posted on our site, they may not meet your needs or wants. That is why we offer the Platinum Program in which you get to choose your own home, as long as the property meets the investors guidelines. Some investors will not purchase rural property, while others will not purchase condo's. If you are interested in finding out more information about our Platinum Program, please visit our Platinum Program page.
How do I fix my credit?
We'll be honest with you...we don't know...but, we do know who you can pay to get it done for you, the first time. What we have experienced is that if you try to on your own you are taking a chance in not doing it right. With so many laws that protect you and your consumer report (credit report), we recommend paying a professional or team of professionals to do it for you. Make sure though that they are experienced. Fixing your credit can save you and make you thousands depending on what you do with that good credit once the time comes. Pay the money and start on it now. Homes are always going up and rates are a big factor in your payment. Having good credit not only enables you to purchase a home sooner with a lower interest rate, but it will also save you money on all financing, credit, and insurance. We recommend Fix Credit Biz from personal experience (even we had bad credit). You may want to check out their video; you'll be surprised to hear what they have to say. Either sign up with them or ask around. Either way, unless you are an experienced lawyer or former credit reporting employee, figuring the right way to clean your credit will cost you much more and take a whole lot of time. Fix Your Credit Now!
How long does it take to move into a Lease Option?
Not that long. Since there is no bank qualifying, it can be as soon as 1 day in some cases, but sometimes you may need to wait for the seller to move out if he still lives there. Sometimes sellers have tenants living in the home that are moving out, so you may need to wait until that time, in addition to any clean up time there is between moves. As long as you can meet the minimum requirements of the seller, moving in is much faster then going through a home loan process.
|
