If you are getting into a home that is 300k but you never prequalified for 300k. Now when your 2 year lease is up, you only qualify for a 150k home. Fulfilling your lease/contract will be near impossible. You will lose your initial down payment that you gave the investor. You will also lose all of your rent credit throughout the two year lease and the investor can keep the home. So essentially you are walking away with nothing.
Unfortunately, the last two years you’ve been paying inflated rent. The best practice is to get approve by someone that is familiar with the lease to own business. Someone that has the fundamentals of lease to own and knowledge of the different options that can be added to contracts. Also factor in how long will It take you to fix your credit situation and if you will be able to afford the home after your lease term.
A crooked investor does not have your best interest at heart. They will accept you in any home no matter the price.
Get pre-approved – Get preapproved by someone that you have trust in. If you’re not mandated by someone before you get approved, that is not a good sign.
Try to agree in your contract for an option to extend or an option to purchase the home early. Purchasing the home early may insure you the chance of buying the home at a lower price.
Please ask questions.
- Who’s your mentor?
- Who will be handling the contracts? If this is an investor that is knowledgeable with lease to own, ask how many lease to own contracts have you’ve done in the past that has come to full fruition?
- who has actually purchased out there lease and bought their home. To those who did not purchase, was there anything done to help the lease purchase the home?
Lease to own can be a great option. Just make sure you work with the right person that is knowledgeable in the rent to own leasing industry