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In about 3 months, I will be applying for a USDA direct loan. I have great credit with very little employment history due to college, but shanethemortgageman assures me that my college major will probably suffice. Failing that, I have a co-borrower if need be. So my odds of successfully getting a mortgage loan are pretty darn solid.
I can't apply for the loan right now because I haven't been working long enough (just graduated). So, I'm trying to get creative in the meantime.
Would it be laughable to offer a prospective seller in a desperate market a kind of "rent to own" scenario, in which I propose to rent for 6 months until I get a mortgage, then buy it at a price with paid rent factored into the offer?
Many people have done the same thing.. Basically, rent to own.
Thank you.
I'm just curious as to how to approach the subject, because of course, it's not a traditional rent to own scenario as I understand it. I won't be putting anything down, and I'll be paying the owner off via mortgage loan within mere months.
yes... sounds like you want to basically rent the home until you can qualify. Best way to approach it is be honest with the seller. Many sellers are desperate to sell, so they are more willing to listen to alternative methods. You could probably even find a seller that is willing to carry the note so you don't even have to find traditional financing.
When I bought my house, I needed about a 60-day close time, and the seller actually approached me, asking if I wanted to rent the house in the meantime. The place was sitting empty and he'd been trying to sell it for about eight months.
I agree that many sellers are willing to be flexible, so it never hurts to ask!
In about 3 months, I will be applying for a USDA direct loan. I have great credit with very little employment history due to college, but shanethemortgageman assures me that my college major will probably suffice. Failing that, I have a co-borrower if need be. So my odds of successfully getting a mortgage loan are pretty darn solid.
I can't apply for the loan right now because I haven't been working long enough (just graduated). So, I'm trying to get creative in the meantime.
Would it be laughable to offer a prospective seller in a desperate market a kind of "rent to own" scenario, in which I propose to rent for 6 months until I get a mortgage, then buy it at a price with paid rent factored into the offer?
Thanks!
I am no USDA expert, but I beleive you will only need one paycheck under your belt before you can qualify.
As others have said, some sellers may be willing to do this. If they have a smart agent, however, they will require you to be in a lease agreement, with normal lease terms, and to pay something down as a deposit. That deposit may be nonrefundable, but applied to your down if you actually close. The rent amount may be more than market rate. There may be an increase in rent if you don't close on time. Any of those would be normal things for the seller to ask for. Something normal for you to ask for might be to have part of your rent each month applied to your down if you successfully close.
I will tell you that most lease/purchase transactions do not close, and either the buyer/tenant moves out peacefully or gets evicted. There end up being loan problems, credit problems, appraisal problems, inspection problems, etc.
I'm not trying to discourage you or telling you this is a bad option, just trying to make you aware of some things you might expect to see.
Make sure you work out terms such as who fixes things that break during your lease period. That would normally still be an owner responsibility, but I have seen people on these boards who have been in your situation and the owner told them they had to pay for water heaters, roof repairs, appliances, etc.
I think one issue may be determining the purchase price. Do you do that now or in 6 months? What happens if you determing that now and prices drop? Are you going to be happy paying the original amount?
I think one issue may be determining the purchase price. Do you do that now or in 6 months? What happens if you determing that now and prices drop? Are you going to be happy paying the original amount?
More than that, if the value drops, and the house doesn't appraise, are you going to have the cash to make up the difference?
i have a house that my wife and i are looking at its be on the market for 597 days and had no baits and we are working with our bank and they are tilling us 3 to 12 mths we can buy the home then but we dont wont to lose the home so is it i deal for a lease optinon.
bigbear
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