I don't have the best credit, but can I still rent to own property, or buy a foreclosure?
Question:
How does a rent to own situation work? Would I pay the property insurance, taxes, association fees, ect on the condo? Or does the owner pay these things until it's paid off?
Also, can the owner change his mind at anytime before I've paid off the balance, which would mean I've utlimately just been paying rent?
Now...if the above doesn't work for me due to bad credit. What would be the answer to the above questions if I chose to buy property that was in foreclosure?
I AM SICK AND TIRED OF RENTING AND NEED MY OWN!
Thanks
Answer:
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The is a difference between bad credit and the lack of credit... IF the condo owner is owner financing then yes you can purchase the condo... If you are going through a bank then credit will make a difference but there are orginazation that will finance to any credit class just about.. the interest rates will be higher but fin. is probley availabel.
Rent to Own is you are paying the landlord X number of dollars toward the purchase price of the property and the rest is going as rent ( just like interest to a bank) the problem with this is that the payments are not usually recorded on your credit history so you are not building nor improvign your score.. I love Rent to Own 90% move out before the property is theres and I get the property back.with there money in my pocket..
No .. once contracts are signed all the requirments have to be meet for the owner to pull out .. DO NOT BUY WITH OUT CONTRACT ...
you can pay you own insurance in some instances in a rent to own the property is still titled in the owners name so he will propley pay the taxes out of yor money ..
My expereience with forclosure is bad if you do not have cash to buy... foreclosure or usually bank financing so finacing is usually the same...
read tips and articles on real estate, loans, debt/credit and much more on money matters on this site
Jim, who answered above, did well. Where I live, Ohio, they don't call it rent to own if it's for a house, they call it a Land Contract. My wife had terrible credit when I married her, I had no credit, good or bad. We bought a house on a Land Contract. In fact there's a local realtor who specializes in offering Land Contracts.
The property owner must own the property free and clear and be willing to finance you. Then it's between you & them to who pays the taxes and insurance. A good Land Contract will protect both you and them. If the property is not owned free and clear then no mortgage company/bank will have anything to do with it.
What we did was to sign a Land Contract with the home-owner, who happened to be a realtor, who took a chance on us. After eight or nine months we then started looking to get conventional financing, we were turned down by company after company until we found The Mortgage Edge who worked and worked and finally got us financed. We used all of our monthly payment to count as our down-payment. Now we owe a mortgage company and the property owner was paid off (that was his hope when he offered us the contract, but we couldn't stayed under that contract till the end, an no they can't take it away from you if you pay on time). When we did get a loan it was in my wifes name (although the house is in both her name and my name), we got the loan based on my income and her terrible credit. Bad credit, it seems, is better than no credit. Go figure. Good luck!
Buying a foreclosure with bad credit is difficult; if you buy at the courthouse you need to bring cash. If it is a bank selling a foreclosed property, they will require proof of funds.
Rent to own is different. Normally, the way it is done is with a lease-option. The way it works is: you pay the owner a non-refundable fee for the option to buy the house in the future at a designated price. In the meantime, you pay him rent. During that time you are the only one who can buy the property. If the deadline to excercise your option comes and you don't buy, you will lose your option fee. If you decide to buy, your fee will be credited to you. There is a very high number of options that don't get excercised (some experts put that figure at 50%), either because the buyer was never really in a situation to buy, or because the owner set an unusually high option price.
Don't get desperate to own a house. Sometimes it is better to rent. It's all in the numbers. If you buy a house on a rush and find yourself having to give a high down payment, pay more for mortgage, taxes and insurance than you are now paying for rent, and property values are flat or slightly going down (like in most markets today), it is a really bad idea to buy instead of renting.
Good luck,
Mario
http://www.goodneighborbuyshouses.com...
You will want to do a land contract instead of a rent to own for a couple of reasons. By doing a land contract and having it recorded at the county court house it will limit what the owner is able to do with the property while you are in the land contract. By having it recorded the owner will be unable to refinance the property without resolving that lien on title. Also with a land contract you will receive credit for each payment you make where as a rent to own usually it is just that rent and you will have to purchase the proerty at a future date. The land contract will allow you to refiancne the property which will allow you to roll your closing cost into the loan at that time. You will want to get an amortization schedule which will show how much of your payment will be applied towards principal and interest each month. make sure you pay each payment with a check, not a money order or cash because it is considered a privatley help mortgage and most lenders will require proof of payment and will not accept a verification from the owner this will also give you a record in case there is a dispute about payment.
Buying a foreclosure is going to be harder to obtain without a down payement unless you are purchasing from the owner and not the bank. On certain circumstances if the owner is in foreclosure but the process is not final you can purchase from the owner as long as you cover the amount owed the bank but normally you will need a down payment.
I have worked in the lending industry for 13yrs and manage a mortgage broker office in Ohio so if you would like more info or would like me to look into other options you can contact me at cbrown@structuredmortgageltd.c... or call me at my office (614) 985-3771.
Thank you,
Curt
If the owner will finance your purchases (through ending or with a balloon) then you need no credit with anyone but the owner. If you made a downpayment to him and monthly payments you would build equity and at a certain point it is pretty easy to get bank financing when you have a large percentage of equity.
Caveat emptor - it's all in the paperwork! It would be smart to have an attorney prepare the contract(s).
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