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If you are considering doing rent to own, there are a few things that you need to consider before hand.

1. Is a lease purchase better for me or the seller?
In most cases, sellers who are willing to do a rent to own scenario are typically having a hard time selling their home otherwise they would just sell it outright. This is typically due to the fact that they are over priced. However in a booming market a lease purchase can work out to the benefit of the buyer if the seller will lock in on a price. Basically you can buy a overpriced home today but it may be lower than that what values may be in a couple of years.

2. Why are you considering a lease to purchase?
In most cases renter/buyers are considering this type of arrangement because they either lack the credit to obtain a loan, do not have adequate savings for a down payment, or they do not feel that they have been at their current company for long enough.

Considering Chattanooga Lease Purchases?

Reasons to Rent to Own
A- If you are not credit worthy now, there is no guarantee that you will be able to obtain a mortgage when the option of the lease comes due. This means that any deposit may be forfeited to the current owners and they can sell the home from underneath you. This is really not a good reason to consider a lease purchase. Current credit limits are 620. There are also a couple programs that may allow you to go lower, pending other criteria. Also if you are close to a 620, our lending partners can help you raise your score. If your credit is below a 500, you should probably consider Chattanooga houses for rent and speaking to a mortgage consultant on how to best prepare yourself to own in the years to come.

B- This is an acceptable reason for considering a rent to own and is actually the rational behind how this type of purchase started. However in today’s market, there are several ways to purchase a home will very little to no money down including USDA and THDA loan products to name a few. In fact, you’re upfront cost would likely be less than doing a lease purchase.

C- If you have only been at your position for a month or so, you may need to establish yourself before obtaining a mortgage. This will vary on the type of work you do (W2 vs. 1099), if it is full time, and if you’ve had any breaks in employment or change in industry. In most cases if you have new job as full time W2 employee in a similar position as your prior job or your fresh out of college and have not had a significant break in employment, you should be able to obtain a loan, pending credit.