Tenants often tell me they don't think they will qualify to rent-to-own because they have bad credit. They are pleasantly surprised to find out that rent-to-own (also called lease-option) is the perfect way to get the house you want to buy even with bad credit!
Although every home has different qualifications, most rent-to-own homes are available to someone with a very low credit score or even no credit. The most important qualification is your desire to IMPROVE your credit score.
You can often move into a rent-to-own home with a score in the 500s as long as you can prove you have enough income to pay the monthly rent and you have money to put down towards the purchase before you move in. Your monthly gross income before taxes should be about 3x the rent. You usually need to pay about 3 - 5 % of the purchase price before your lease starts.
It's very important while you are renting that you are improving your credit score, so you will be able to qualify for a loan when the lease ends.
There are many ways to do this. You can start by learning about your credit report and what to do to increase your credit score. You can do that free at Gary Moore's website:
www.repaircredit123.com
The next step is usually to find a good credit repair or credit counseling company.
I recommend Gene Schwalen at S.O.S. or Score Optimization Systems. You can reach Gene at 866.987.6700 Option 1
optimizemyscore@mycreditsos.comwww.mycreditsos.com
It's also very important to make sure the house you are renting-to-own fits your budget. For instance, if you make $3000 per month in gross household income, you can afford monthly rent that is about $1000-$1200 per month and you can afford to buy a house that costs about $100,000 - $120,000. If you want to rent-to-own a house that costs $100,000-$120,000, you will need about $3,000 - $6,000 on hand to pay towards the purchase before you move in.
Then while you are renting you will earn more money toward the purchase -- your rent credit. At Happy Home Solutions, we try to give very generous rent credit -- usually at least 50% of the rent. That money also goes toward the purchase. For instance, if you are paying $1000 per month for rent, and earning 50% rent credit, then you are earning $500 per month or $6000 towards the purchase in just one year!
Wouldn't it feel great to know that money is going towards your own house you are buying instead of in your landlord's pocket?
Give us a call today, so we can help you make that dream a reality!
Diane and Adam St. James
630-780-4663 office
630-697-4500 Adam's cell
312-213-8137 Diane's cell
Adam@MyHappyHomeSolutions.com
Diane@MyHappyHomeSolutions.com
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