Prepare For a Loan Now or Lose Your Rent to Own Home
At US Lease Option we want to prepare you as much as possible for your rent to own purchase. Besides finding the right seller and negotiating fair terms of your option the most important thing you need to do is make sure you can get financing at the end of your lease. This blog post will overlap some with our how to qualify for a loan article but will focus more on the actionable steps for people in the rent to own situation to take to make sure you get financing so you don’t lose out on the home of your dreams.
Fix Credit Problems
We can’t stress this enough to be able to qualify for a mortgage in the current times of economic crisis your bad credit MUST be restored. If you haven’t read our credit repair check list it’s a great place to start. When it comes to fixing your credit and staying on top of payments to qualify for a loan it really shouldn’t be a temporary thing, besides you have to continue to pay your mortgage until the home is paid off or you sell it. We recommend working with your spouse and family members to create a monthly budget that can help you cut spending, pay off debts, and live below your means. Being on a budget allows to always pay your bills on time and lower your credit to debt ratio over the term of your lease. Which in turn helps you get financing as well as avoid the experience or re-experience of the painful foreclosure process. Download our free monthly budget worksheet and get started today!
Work with Mortgage broker
Finding and working with a mortgage broker is probably one of the most important things you can do when trying to get qualified for a loan and the earlier you start the better. Mortgage brokers know exactly what it takes to get a loan, they can help you clean up your credit, verify income, give you a timeline of how long you need to get approved and so much more. Check out the National Association of Mortgage Brokers to find your broker before you start looking!
When working with a seller in a rent to own process negotiating you absolutely must negotiate extensions. For example you come to the end of your 12 month lease and its time to buy but, due to unforeseen credit problems, job situations, etc you need more time before you will qualify for financing. If you have a pre negotiated extension you just tell the owner you need to extend the length of your lease before you buy and without an extension the seller could walk away with your down payment and not be obligated to sell you the home at any time. Even the most earnest hard working person can run into a curve balls unfortunate situation and it is better to be safe than sorry when it comes to buying the home you’ve worked so hard to get.
Getting prepared to buy a home is a tough process and not for everyone, but if you stick to it and are dedicated you too can join the millions of Americans who own homes. Be sure to check back often to find more great real estate advice, tips and freebies. Send questions to firstname.lastname@example.org and we will answer them on Facebook, Twitter and possible be the topic of our next blog post!