Solutions for Home Sellers, Buyers, and Renters Throughout Baltimore Maryland
We Buy, Renovate, and Sell Real Estate Properties • Better Homes • Better Communities
Homeownership --- The American Dream ---
Just as compelling today as always
And — we can help even if you’ve had problems in the past or lack the full down payment.
Lenders have a high bar for buyers trying to qualify for a mortgage. Foreclosures and delinquencies are bad for the banking industry which forces them to be strict in their lending terms and rightfully so. Can you imagine lending someone several hundred thousand dollars and then not getting paid!!! Banks are in the business to earn interest on the funds they lend. It is a simple business — depositors get paid interest on the money they place on deposit with a bank, and the bank turns around and lends it out to borrowers at an interest rate that is higher than what they pay depositors. So, when homebuyers default on a mortgage, bankers suffer huge losses. This is bad for the bankers and the depositors. To curb their losses, they must be careful when making loans.
You on the other hand still want the satisfaction that comes from owning your own home. You want the satisfaction of knowing you own the roof over your head. You want your rent payments to do more than just profit a landlord. You want them to profit you.
That’s why home buyers are looking at properties where they can rent with an option to buy. Simply stated — you and the owner of the property enter an agreement that enables you to purchase your desired home at a price you set today and a portion of your rent goes to help you with your down payment.
Let’s take a look at the pros and cons of this type of arrangement so that you can be sure if it is right for you
When you rent with an option to buy your home you get a chance to see if you made the right decision. You get to know the neighborhood and find all the things about it that you like. You get a chance to form friendships, and you get a chance to learn the quirks about your home and decide if you can live with them. You get a chance to test drive your new home and your new neighborhood.
Improve Your Financials
It’s tough to save enough money for the typical down payment on a new home. Plus, if you are new to your job or career you might not qualify for a loan sufficient to buy the home you desire. Furthermore, if you’ve experienced credit problems in the past, some issues might need to be cleared up. By renting with an option to own your home, you get to live in the house you desire, and you’ll be improving your financial position to qualify for your mortgage loan.
Great Return On Your Investment
In a typical rent with option to buy the tenant/buyer often gets credit for a portion of their rent that can be applied toward the purchase price of the home. This means you are building something for yourself. Plus, sometimes, the owner might also match a portion of the rent credit. For example, if the rent credit toward the purchase price of your home is $150.00 per month the owner might match this by giving you an additional $75.00 or more toward the purchase price. That’s like earning a 50% return on your money!!
Fix Your Home According To Your Desires and Tastes
Like any home owner, you will want to show your personality and taste in your home. Often — if you rent with an option to buy — this is possible. It is simply a matter of discussing your desires with the owner and including those terms into your lease and option agreements.
What to Watch Out for …
Real Estate purchases take place in a dynamic market place. Things change daily. Mortgage rates fluctuate. Lender terms follow the economy. House prices rise and fall. All of this can be very confusing and intimidating. So, it is important that you carefully evaluate your decision to buy, rent, or rent with an option to buy. Depending on your personal circumstances and the current market conditions a purchase transaction might be in your best interest. Whenever it seems that this is possible, I will point this out so that you can decide what is best for you.
Be True to Yourself
A rent-to-own transaction is a great solution for those folks who know themselves and what they want.
Since a rent-to-own transaction is comprised of two agreements — a rental lease and an option agreement — it's important that you know your goals and understand your commitment and responsibilities in the transaction.
Rent-to-own transactions are best when the tenant/buyer can complete a purchase in 18-30 months. This means that the tenant/buyer will need to be very clear about their financial capabilities and work with a mortgage lender to guide them through the process so that they are approved for the loan they want. If necessary our mortgage lender can guide you in this process.