If you have wanted to purchase a home but thought that you could not afford to enter the home buyers’ market, then we hope that you’ll consider a lease-to-purchase home. At IPS Amarillo, we provide the property solutions that you need when you are looking to purchase a home. Continue reading today’s post to learn what mistakes you should avoid, and call IPS Amarillo to learn about our available lease-to-own homes.
Check Contract Agreement With Future Mortgage Lender
A lease-to-own home is a great solution because it offers you the opportunity to amass a down payment while you rent the home. When the lease term is up, you will have a nice sum to apply to the down payment, which will lower the overall amount that you owe on the mortgage. It is important to make sure that your future mortgage lender recognizes the agreement that you have with the seller, and also that you keep careful records that document all transactions during your lease period. This way, you will receive the full benefit from the lease-to-own terms.
Request an Appraisal and Rental Schedule
One way that you can protect yourself is to make sure that your rent credit will be eligible for use towards your down payment. You can also request that the seller set your rent above fair market rental rate. Make sure to document everything so that you can prove that your rent was above market, that the agreement clearly defines which part of your payment covers the rent, and that it also clarifies which part of your payment covers the rent credit. Keep detailed records of your payment history so that the mortgage company will have all the information it needs when you submit your application.
Look for Any Problematic Terms
One of the most important things that you should do when you are leasing your home is to make your monthly rental payments on time each month. In fact, the more that you can document on-time payments, the better off you will be when it is time to purchase the home. Many lease-to-own contracts include a clause which allows the owner to keep your monthly rental credit if your payment is late.
Waiving the Inspection
A home inspection is important to make sure that you are truly getting the home that you think you are. Sometimes a home can look beautiful on the surface, but have more serious flaws in the structure or foundation. Don’t assume that because a house looks nice and is in a good neighborhood, that there is nothing wrong with it. A home inspection protects you by disclosing any important items that might need to be addressed before you enter a lease-to-purchase agreement.
Treating Your Home Like a Rental
While in some respects you are renting the home you’re living in, this is not the reality of the agreement you signed. If you signed a lease-to-purchase contract, then it is in your best interest to treat the home as if you are buying it. This means that you should look for a home that you actually want to own in a neighborhood that you truly want to live in. If you are considering entering into an agreement simply because a home is available, but not one that you particularly care about, then take some time to consider if this is the best decision.
Typically, when people leave a lease-to-own home, they leave behind any money that they had accrued toward the down payment. This essentially causes them to go back to square one in their journey to own a home. To avoid this mistake, make sure to choose a home that you want to live in and negotiate the terms of the contract as if it were a purchase.
There are two common mistakes that you can avoid when it comes to the purchase price of your lease-to-own home. The first mistake is not negotiating the purchase price. If you were negotiating a traditional home purchase, you wouldn’t think twice about negotiating for the best price possible. A lease-to-own home is no different — always negotiate. The second mistake is not making sure that the purchase price is fixed. When you enter into an option-to-buy agreement, you want to make sure that the price is set so that you are not blindsided by sudden fluctuations.
IPS Amarillo wants to help you experience the joys of homeownership, which is why we provide lease-to-purchase homes throughout Amarillo. If you are interested in learning how a lease-to-own home could work for you, then please call today and let us show you how you can become a homeowner.