The 5 Rent To Own Secrets They Don't Want You To Know....

How To Stop Paying Rent and Own Your Own Home Don’t Pay Another Cent in Rent to Your Landlord...

It’s a dream we all have – to own our own home and stop paying rent. But if you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours. How could it when you’re not even permitted to bang in a nail or two without a hassle. You feel like you’re stuck in the renter’s rut with no way of rising up out of it and owning your own home.

Don’t Feel Trapped Anymore

It doesn’t matter how long you’ve been renting, or how insurmountable your financial situation may seem. The truth is, there are some little known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information, you will begin to see how you really can:

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Save for a down payment Stop lining your landlord’s pockets, and Stop wasting thousands of dollars on rent.

“If you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours.”

Step By Step Guide Step 1:Decide what kind of home you need and can afford Narrow your home search Before you start looking for a rent to own or owner financed home, you should decide what kind of home you want and the best location. What is the best city or part of town for you based on your job, family, friends, church and lifestyle? How many bedrooms and bathrooms do you need? Will your family grow or decrease in size in the near future? Do you need a garage or basement for storage? Maximum monthly payment After you have a good idea of the type of home and location , decide how much home you can afford. The biggest mistake by far that people make is thinking they can afford a home that they really can't. Take the time to carefully consider your monthly budget taking into account your actual income and actual expenses. A general guideline is to take your monthly income and divide it by 3.5. This will give you a maximum monthly house payment or rent amount. For example, if your monthly income is $3,000 then your payment or rent shouldn't be greater than $857 per month (3,000 / 3.5). After you have this payment amount, subtract it and your other total living expenses from your monthly income. After you do this you should have, at the very minimum, a couple hundred dollars. This left over amount is what should be saved for unexpected expenses, retirement or other major purchases. How much for a down payment Besides determining your maximum monthly payment, you should decide how much you can afford for a down payment. Be sure you don't use all your savings and take into account moving expenses, loss of pay from a job transfer, switching utilities and other unexpected expenses. Usually, for an owner financed or rent

to own purchase, 1% to 5% will be needed for a down payment. Step 2: Learn about rent to own and owner financing This will be one of the most important steps to make sure you make a safe decision to rent to own or owner finance a home. Many horror stories happen because of uninformed or uneducated decisions. There are a couple different types of rent to own or owner financing options. Rent to own basics Renting to own a home is the most commonly heard of type and can also be called lease option, lease to own or lease purchase. In a rent to own purchase, the buyer signs a lease or rental agreement and an option agreement. The option agreement is what allow the buyer to purchase the home. In the option agreement, a purchase price and deadline to purchase the home by is agreed upon. The option fee, which is a non-refundable fee, is also set and is normally 1 to 5% of the purchase price. The rent and rent credit is the last important part of renting to own. Rent credit is the portion of the rent that gets put towards the purchase price. The rent and rent credit is also non-refundable. Learn more about how rent to own works. Owner financing basics Owner financing is the second most popular option and usually the best option for buyers. Owner financing is normally done with a contract for deed or land contract. Owner financing is more like a traditional mortgage because there is a purchase price, interest rate, down payment and loan length. It is different from a traditional mortgage because the deed or title to the home is not transferred to the buyer until they make all the payments, pay it off or get their own mortgage. The biggest advantage of owner financing over a rent to own purchase is that there is normally not a time limit for getting your own mortgage like with a rent to own purchase. Step 3: Find a home Finding the right rent to own or owner financed home can take time and work. The key is not to get discouraged. Besides looking for rent to own homes or owner financed homes on BubbaFinder.com, the best places to find a home are the classified section of the local newspaper, Internet Home Listing Sites, for sale by owner signs and homes for rent. Even if a home for sale by owner or for rent is not advertised as a rent to own or owner financed option, many times, the owner will consider it.

Finding a home can be easier by following step 1 and narrowing your search. During this search process, check the condition of the home and make sure there is no obvious damage and everything is in good working condition. A home inspection can always be done if you are unsure. Step 4: Apply and negotiate purchase After you find a home that you like and the owner is willing to owner financing or rent to own it to you, most owners will require you to submit a basic application to them. Information that is usually asked for includes contact info, employment info and landlord references. When filling out the application be sure to include as much accurate information as possible. If you schedule an appointment to see the home or meet the owner make sure you are on time to show your dependability. Many people that apply for owner financed and rent to own homes do so because of less than perfect credit. Most owners don't rely too heavily on credit or credit scores. The most important thing is a reliable income that is at least 3.5 times the monthly payment like described above and references. Any other information that can show your reliability, ability to pay and

take care of the property should be given to the owner to improve chances of being approved. Owner might be unwilling to negotiate on the price, payment, down payment very much because they are offering an easy way to work towards owning a home and the ease of being approved, even with bad credit. Even so, it is always a good idea to ask. Step 5: Improve credit and get approved for a mortgage Talk to a mortgage broker or lender and see how close you are to qualifying for a traditional mortgage. Here are a couple questions to ask. How long do you think it will be before I could qualify? What purchase price do you think I could qualify for? What would I need for a down payment and closing fees? What should I do to improve my credit? Take what information the lender can give you and start to build your credit. Besides making sure you pay all your bills on time, here are a few tips to start to improve your credit. Contact your creditors as soon as you know you will have a problem paying bills on time. Try to work out a payment arrangement and negotiate with them to keep at least a portion of the late notations off of your credit reports. If your situation is serious, see a legitimate, non profitt credit counselor. counselor Avoid the scam artists who promise a quick reversal of your credit problems.

How Does Rent To Own Work? Rent to own is also known by several terms such as lease option, lease to own or lease purchase and are all used to describe the same basic rent to own concept. Rent to own basic overview In a rent to own purchase, the buyer signs a lease and an option agreement. This allows the buyer to rent the home as well as give them the option to purchase the home at a set price during a certain time period. There are 5 important parts in a rent to own transaction. They include the rent, rent credit, purchase price, option length, and option fee. Rent credit The rent credit is the amount of rent that gets put towards the down payment. It can either be a set portion of the market rent or an amount above the market rent. For example, if the market rent is $1,000 per month, the seller might credit $300 of that towards the down payment. Or, they might ask $1,000 per month rent and a $200 rent credit for a total of $1,200. Make sure to pay on time. If it is late, the seller might have the option of not giving you the rent credit for that month. Be sure that all details of the rent credit are included in the option agreement. Purchase price The purchase price is one of the most important parts of the rent to own agreement. This is the amount the buyer will purchase the home for. Before signing any type of contract, do a little research and make sure the price you agree on is a fair price. Even if the real estate market goes up or down, the purchase price will not change. Option fee The option fee is is a one time fee paid at the start of a rent to own purchase. If the buyer purchases the home within the agreed upon time period, 100% of the option fee will go towards the purchase price or down payment. If the buyer does not purchase the home it is non-refundable and becomes rent for the seller. The option fee is normally 1-10% of the purchase price. Option length The option length in a rent to own agreement is the amount of time the buyer has to get their own mortgage and purchase the home. This time period normally ranges from 3- 5 years and can sometimes be extended is the seller and buyer agree. If the

option period expires the buyer will lose all rent credits and the option fee. Steps 1. Realize that a home made available via a standard lease may include an option to purchase that home at a specified price over a specified time period (usually one or two years). In order to acquire that option, the renter/buyer must pay a one time, non-refundable, fee called the "option consideration". The exact amount is negotiable, but it is usually ranges from 2.5 to 7% of the purchase price. 2. Negotiate a fair contract that will credit the buyer 100% of that option consideration upon closing of the sale. 3. Look for a negotiated percentage of all rent payments being applied toward the purchase price of the home. Typical terms and conditions 1. Consider what you might expect to find in a contract as follows: In order to receive a rent credit of 50%, time is of the essence. You must pay your rent on or before the due date of your lease (typically the 1st of the month). This means it must be received by the lessor (landlord) on or before the due date. Any payment received after the due date will result in a 0% rent credit for that month, a late fee may apply and you will not be building any equity. Maintenance is the responsibility of the tenant buyer. You are now renting to own, and home ownership requires maintenance. This includes things like broken windows from stones or baseballs, clogged drains, peeling paint, broken appliances, burnt out bulbs, lawn work/snow removal, etc. If any major repairs are required to ensure habitability, the owner remains responsible. You need to have "option consideration". Option consideration is typically 2.5% to 7% of the purchase price of the home. It is a non-refundable payment, of which 100% is credited toward the purchase price, which binds the lease purchase contract. 2. Learn how this works by studying this example transaction: Imagine a nice 3 bedroom, 1 bath single family home located in a near west suburb of Chicago, in a great neighborhood with good schools and a strong community. It has been freshly painted, cleaned, and is ready to move in. The purchase price will be $215,000. Monthly rent payments will be $1,500 and you will receive a 50% rent credit ($750 per month). You

need between 2.5% and 7% in up front option consideration. Let's say your budget allows for $6,000 for option consideration. This equates to approximately 2.8% ($6,000/215,000). You will also need $1,500 for the first months rent for a total initial payment of $7,500. *Please note: Option consideration is not a security deposit. It is a non refundable payment toward the purchase price and is 100% credited toward reducing the price of the home.* Suppose you paid all your monthly rent payments on or before the due date and you choose to buy the rent-to-own home at the end of the 12 month lease purchase contract. You will have $15,000 in equity before you even own the home! Here's the math: Lease Purchase Price - $215,000 Less: Option Consideration paid at lease signing $6,000 Less: 50% rent credit of $750/m * 12 months $9,000 Net Purchase Price after credits - $200,000 You started with $6,000 and by paying your rent on time, your equity position grew 150% (another $9,000) for a total of $15,000 with 12 months. Not a bad deal! Many people find it nearly impossible to save $9,000 in a year with all the costs of living constantly on the rise. 3. Assure that this is a sound approach by getting it in contract form. Now you may be thinking, "OK, what's the catch? This sounds too good to be true." Answer, there is no catch. There are many possible reasons a landlord/seller may want to enter into a rent-to-own agreement. Some reasons may include: Needs to maintain ownership for at least one year for tax purposes, Unable to get a fair price due to local conditions Tired of performing minor maintenance. When one sells a home through a realty service, a commission of 5-7% is typically paid. In the example above, this can cost more than the rent credit. Since realtors are usually not involved with this type of transaction, there is no commissions and the landlord can afford to pass along the savings to tenant/buyer in the form of rent credits When the tenant becomes the tenant buyer (via rent-to-own), there is an immediate sense of pride in ownership. Tenant buyers add value to the community. They take care of their future property, make improvements, and feel good knowing their rent money is working for them (reducing the purchase price) rather than just making their landlord rich. 4. Consider the many advantages for the renter. Some include: Building equity toward home ownership No bank or finance company involvement Poor credit history may not be an issue.

6 Little Known Facts That Can Help You Buy Your First Home The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down payment on something more permanent. But saving for this sum doesn’t have to be as difficult as you might think. Consider the following 6 important points: 1. You can buy a home with much less down than you think. There are some local or federal government programs (such as 1 st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options. 2. You may be able to get your lender to help you with your down payment and closing costs. Even if you do not have enough cash for a down payment, if you are debt free, and own an asset free and clear (such as a car for example), your lending institution may be able to lend you the down payment for our home by securing it against this asset. 3. You may be able to find a seller to help you buy and finance your home. Some sellers may be willing to hold a second mortgage for you as a “seller take-back.” In this case, the seller becomes you lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments. 4. You may be able to create a cash down payment without actually going into debt. By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.

5.You can buy a home even if you have problems with your credit rating. If you can come up with more than the minimum down payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation. 6.You can, and should, get per-approved for a home loan before you go looking for a home. Pr-approval is easy, and can give you complete peace of mind when shopping for your home. Mortgage experts can obtain written per -approval for you at no cost and no obligation, and it can all be done quite easily over the phone. More than just a verbal approval from your lending institution, a written per-approval is a good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

*Consider dealing only with a professional who specializes in mortgages or Rent to Own Properties. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically there is no cost or obligation to There are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to There are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to enquirer. Don't lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning. This conversation costs you nothing. And, of course, you shouldn’t have to feel obligated to buy a home at the time you review this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you’ll be when you are ready to make this important step. *