Rent to Own Q & A
On ocassion, we have rent to own options. If you don't see that noted on the listing, please visit www.tnrproperties for possible availability.
Here are the ANSWERS to questions
YOU may have…
I Found a Home I Love, But My Credit Is Bad, Can I Still Be Considered?
ABSOLUTELY!!! Our program is designed to work with individuals with good, fair, or blemished credit. However, there is an application process as we want to ensure that you have the proper income, and a history that reflects your ability to pay, or a pattern of credit restoration or rehabilitation. In other words, if you are recovering from a trial in your life, we want to see a pattern that you are establishing a history of payment since that time. Rent to own is a serious proposition and an investment in a home purchase opportunity. We want to make sure that we treat you fairly and are not putting you in a position in which you cannot be successful. We also offer owner financing where you can buy the home without having to qualify at a bank. In some cases, we can start you out in a lease option situation and “graduate” you to our owner financing program after a period of time. We can qualify you based on your established history with us. This is why so many buyers consider ABC Residential Properties, LLC as their first choice when looking for their dream home!
I Have Heard Some Negative Things About Rent to Own, Why Do People Do Them?
There are a number of reasons that people enter into lease to own or rent to own agreements. I often say that rent to own is like road testing a car, you get to ride it for a little while as you make a decision as to whether or not you want to buy it. This program is good for people they may not have the necessary credit right now but are in the process of rehabilitating their credit situation. This also is a great program for individuals who may be self-employed and may not have an established business history to qualify traditionally from a bank, individuals with short term employment history; in addition individuals who are relocating to an area and want to have an ownership interest in a home rather than pay money in traditional rent, the rent to own program also gives them a viable option to home ownership.
What If I Don’t Have a Huge Down Payment?
We will try to work with you even if you don’t have a lot of money for down payment! There are a few different programs where you can get into the house you like and complete your down payment while in the house (please ask us about our Down Payment Assistance Program).
What Is Your Down Payment Assistance Program?
Our down payment assistance program may help you by allowing you to get into the home you like with a minimal amount of down payment and be given a short period of time to pay the balance of your option payment or down payment over several months.
I Expect Some Additional Funds for My Down Payment, Should I Wait?
If you found a home you like, you should NOT wait! You can move in with as little as two month’s rent down and transition into our lease option program when you have the additional down payment.
How Much of a Down Payment Will I Need?
That depends on your monthly payment, gross income and the price of the home. However, a range can be as low as $2,000 or up to $10,000 for most of our homes. The rule of thumb is 5% for a Lease Option / Purchase program and a minimum of 10% for our Owner Financing program. Remember, we accept borrowed funds from family or friends, your pension plan, etc. and in some cases can give you up to 30 - 60 days to make the down payment.
What Methods of Down Payment Are Accepted?
We are flexible in how we can work with you with your down payment, unlike many of our financial institutions and other lenders, we are able to accept borrow funds from friends’ family who may be willing to lend you the money. You also may be eligible to borrow money from your 401K or retirement funds to purchase a home without penalty.
What Happens to My Down Payment (Option Payment)?
The option payment is paid upfront and secures your option contract to purchase the property. The option fee is non-refundable. If you decide not to purchase the home at the end of the agreement or default upon your agreement, then you will lose your option fee as well as any other money that you may have put down. The option fee grants you the exclusive option to purchase with a contract that has agreed upon terms. These terms cannot change, and the seller must sell the property under the option terms. However, the buyer has the option to buy or not buy. This is the cost of the seller having made that commitment to sell to you exclusively over a period of time. Should you exercise your option to purchase, then the option fee will be applied towards down payment or reduction of purchase price.
What if I Fail to Qualify or Am Unable to Purchase in Time?
If you are unable to purchase the home during the option period, one of two things usually happen:
The contract expires and you no longer have the legal right to purchase the property. Further, you forfeit all interest to the property and the option fee paid to the seller.
The option agreement may offer you the ability to extend the agreement. If this extension is offered, it typically requires a small fee and/or criteria you must meet. For example, a seller may require that you are currently qualified for a mortgage and in the closing “process,” to qualify for the extension.
How Long Does It Take to Move Into a Property?
Once the complete application is submitted and approved, it is usually in a 1-2 weeks.
Is There a Lot of Paperwork Required?
Absolutely not! As part of the application process, we will need your current W-2’s, two years of tax returns, a completed application, and payment of the application fee. Upon approval, a local attorney will prepare all the documents and we will arrange a date for contract signing. The documentation will include a summary of all financial terms and conditions of your purchase, such as (if applicable): purchase price, cash down payment, interest rate, monthly payments, escrow payments, and any other terms specific to your transaction.
Our process is really fast and easy.
Are you able to provide financing if I'm unable to get traditional financing?
In some cases we are able to provide financing, typically for a short period of time five to seven years. We would still have to qualify you for that program and typically if you are in our rent to own program and have established a payment history with us, we may be able to convert your contract from rent to own to seller finance. However, this will require additional down payment money typically a minimum of 10% is required.
What Is My NEXT STEP?
Complete the following questionnaire- Copy and paste in your URL: https://forms.office.com/r/kbCeUqenPs
If you found the house you like, now is the time to get all the financial details of your purchase ironed out. We will discuss the financing plan with you and tweak it to your particular situation. It is IMPORTANT to bring an initial Deposit to Hold of a minimum $1,000 to your appointment, so we can take the house off the market. You need to “stake your claim” before someone else does! The Earnest Money Deposit is applied towards your (option payment) down payment. This money is refundable back to you if your application is not accepted. Please realize, until we receive a commitment from you, the house is available to other buyers, regardless of prior verbal or email communication we may have had before.