This is another necessary step toward buying a rent to own home that most families hate doing! I can totally understand, the last thing people want to be told is they don’t qualify for something.
Don’t Sign Any Contracts Yet!
About now, you’re breezing through the steps in our rent to own guide.
You’ve got your credit report and, if needed, you have started working to improve your credit score with Cake credit repair. Now you’re ready to dive head first into signing a contract for that perfect home, right?
No way! You need to speak to a lender right now, before getting more serious about a house.
Don’t forget that mortgage professionals are on your side and work for you. They will review the most up-to-date mortgage guidelines with you and simplify the complex procedures of the mortgage process.
The requirements to qualify for a mortgage are constantly changing! So even though you aren’t planning to purchase the home today, you still need to VERIFY that your family’s income is enough to qualify for your target purchase price.
Your lender should also help you create a timeline to estimate the time you will need to qualify for a mortgage. This timeline can help you set achievable goals to follow so you will qualify for your mortgage within the given time-frame.
The LAST thing you want to do is move into a rent to own home with a contract length that is to short for your situation.
I’ve seen this happen many times. A prospective buyer pays a $5,000 option fee upfront with a contract to purchase the home in 12 months. After several months of making payments they find out they stand no chance of qualifying for a mortgage within the agreed upon time period.
Keep in mind, the seller has no obligation to sell you the home after the option period expires. There goes $5,000 down the drain!
Don’t Expect Anyone to Assist YOU
The majority of sellers offering their home as a rent to own are not going to help you determine if you can qualify for a mortgage within the time frame agreed to. They likely don’t know how to help you and often aren’t concerned with something that is really your problem to deal with.
The Quick and Easy Way to do this from Home
I recommend that you go to an online mortgage website like LendingTree. It’s a simple, no-obligation service where you enter in your basic information and LendingTree will find the best lender for your situation and have them contact you.
Whether you choose to contact LendingTree, another online mortgage site, or a local lender, these are the questions I recommend you ask:
- Based on my current credit, how long will it be before I qualify for a mortgage?
- Based on my families income and debts, what home price can I plan on qualifying for?
- What items on my credit should I work on and what blemishes should I ignore?
- Using an FHA loan at the home price I qualify for(asked earlier) what can I expect to pay for a down payment and in closing costs?
When you speak to your lender make sure you write down their answers to the questions you ask. The home price estimates, down payment amount, and closing costs will be useful numbers in the upcoming steps AND when you begin your rent to own search.
Keep in mind, we’re always looking for trusted, top performing companies that treat our members well!