No More Banks!! Facts About Owner Financing
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In this housing market, getting a mortgage is tougher than ever! We make it easier to own your own home by offering various alternatives for "owner financing".
This means that instead of you having to go to the bank and ask for a mortgage, we provide you a short-term financing solution. You then have anywhere from 12 to 36 months before you need to go to the bank to get your traditional mortgage.
Here's a general idea of how one program works...this is a sample of a "lease-to-own" agreement (also sometimes called a "lease option")
This means that instead of you having to go to the bank and ask for a mortgage, we provide you a short-term financing solution. You then have anywhere from 12 to 36 months before you need to go to the bank to get your traditional mortgage.
Here's a general idea of how one program works...this is a sample of a "lease-to-own" agreement (also sometimes called a "lease option")
~ You sign a "purchase option" which is a legal agreement that allows you to purchase the house by a specific date (usually 12-36 months from the date of the contract) -- in this agreement, you agree to your purchase price and other terms of the purchase (this is somewhat similar to the type of purchase agreement you would sign if you make a traditional offer on a house through a Realtor)
~ You also sign a lease which allows you to move into the house immediately. We also offer you a "rent credit" which means a portion of your rent will be applied toward the purchase price of your house provided you make your payment on time each month.
The most common questions we hear are:
(1) "How much money will I need to move in?"
and
(2) "What if I have some problems with my credit?".
So, let's address those two issues...
"How much money do I need to move in?" It is true that you will need more than you would if you were just renting the house. However, it is significantly less than most banks will require which makes the process easier! Most companies that provide lease-to-own financing require 4-5% down. We try to be a bit more flexible and our requirements to move in range between $2,000-$4,000 depending on the price of the house you select. We'll do our best to make arrangements that benefit us both. Here is an example of an arrangement we made for a couple to help them buy their home through our lease to own program...
"Jon and Krista only had $1,500 available to move into the lease-to-own home they wanted. We talked about their situation in detail and through the course of the conversation, they mentioned that every year in March, Jon received a large bonus from his company. We structured their lease so they could use the $1,500 they had to move into the house right away, then used the funds from their bonus each March to pay toward their option consideration which was applied toward the purchase price of the house."
We'll do our best to help find a solution that fits your needs. Our advice is to come to one of our open houses or call us for a house tour -- see the quality and style of the homes and talk with us about your situation.
"What if I have some problems with my credit?" We expect that you may have some past credit issues; studies by the large credit reporting agencies indicate that the vast majority of consumers have blemishes on their credit bureau as the result of divorce, medical expenses or other unfortunate circumstances. However, if you are trying to buy a house through a lease-to-own program, you do eventually have to go to a traditional bank and get a mortgage. So, if you have extensive credit problems, we suggest you consider doing two things...(1) contact a credit repair/counseling service and investigate how they may be able to help you and (2) contact a mortgage broker who has experience in working with individuals who are rebuilding their credit. They can tell you honestly whether or not you can repair your credit and get approved for a mortgage within 2-3 years and be specific with you about what steps you need to take to ensure you are ready when you apply for your loan.
We are ready to work with you to help you into a home despite less-than-perfect credit but we also want to ensure that you are prepared to get your mortgage when the time arrives.
