Author : Vincent Polisi
When people try to rent to own a home on their own, they typically make some critical mistakes These mistakes can cause them to fail to reach their goal of home ownership Let’s look at some things you can do to improve your chances of success with lease options and rent to own homes
Verify the Mortgage is Current
As the owner of one of the nation’s largest providers of rent to own homes listings, I can honestly say that not a week has gone by in the last 18 months that I have not gotten a call from someone who was having to move out of their rental home or rent to own home because the property was being foreclosed on Mind you – they had been making payments all along Unfortunately, the homeowner had been pocketing their money instead of making mortgage payments
There are some new laws that help protect renters and people renting to own from having to move out in the event of homeowner default, but the smartest thing you can do is make sure that you just don’t ever get into this situation Before you sign a contract, require the homeowner to provide you with verification that the mortgage is current It is also a good idea that you require this verification on a monthly or at least quarterly basis
Sufficient Term
The reason that most people decide to rent to own a home is that they do not currently qualify for a mortgage This can be a smart decision, but only if you allow yourself enough time to actually qualify Most people negotiate a contract term that is too short Unless your credit is already fairly good, a six or twelve month contract just is not going to give you enough time to improve credit to the point that you qualify You should attempt to negotiate a rental term of no less than 24 months If you have had a recent foreclosure, you will need at least 36 months to qualify This will give you sufficient time
Make sure the owner really wants to sell
There is a method of real estate investing that pushes “investors” to play a game with lease options and rent to own homes Essentially, they seek out people who have bad credit and no other way to get a home These people are desperate They then option them a home on a very short term with a purchase price that is so high that no mortgage company would ever make a loan in that amount The purpose is to collect the option fee and make it such that the renter could never actually purchase the home They then repeat the same process with someone new in a year
Vincent Polisi is the founder of financethedream.com, the nation’s premier rent to own program. To see rent to own houses, please visit us on the web.
Syndication Source: Thought Search Articles