Q: We went through foreclosure last year. With the abundance of houses on the market, we were hoping to find a lease purchase deal while our credit recovers. We haven’t had any luck in finding one. Any advice would be much appreciated. Thanks.
A: You may not be able to qualify for a loan for up to 5 years, so a lease/purchase (also known as a “lease with an option to buy”) might make some sense if you find a seller who is willing to do that kind of deal.
If you want to find a lease/purchase, you’ll need to find someone who is renting a property you’d want to buy and then make an offer. Often, you’ll find lease/purchases advertised in the “properties for rent” section of the local newspaper or online at a website like Craig’s List.
If you’re going to work with a real estate agent, you might want to hire based on the agent’s ability to find a lease/purchase arrangement for you. The ideal candidate will be a seller who has already moved from the property and has paid off the mortgage.
But since you will have to wait another 4 years to get a loan, it may be tough to find someone who wants to wait that long to get his or her money. Most sellers are willing to hang in there for a while but want to know that if they are trying to sell their property, the sale actually occurs within a couple of years after the documents are signed.
If you aren’t lucky finding an owner willing to lease you a property with an option to buy it, you might just want to rent for a while until your credit improves and you have the money to put down towards a down payment and can get financing in a traditional way.
Are there any different regulations or stipulations to be aware of in a Lease to Own situation if the original owner still has an outstanding mortgage? So the situation is: I want to lease to own this property, the original purchaser is willing to do so (he no longer lives in the property), and he still has an outstanding mortgage balance with the bank. I just want to make sure it’s all above board.