Rent to Own FAQs

How does our Lease Option Program Work?

First, we'll ask you to complete our self evaluation questions below to evaluate if: "Rent to Own is right for me--right now? This evaluation will help you determine if you are ready to buy a Rent to Own home.  Below are the items your need to consider and/or actions you'll need to take before your truly ready to start shopping for a lease option home if you need help during the process don't hesitate to call we are happy to answer any questions or help point you in the right direction of who to speak with.

  • Do you have a reasonable option fee saved ?  Typically  3.5% -7% of the purchase price is what you'll need to move in get the home under contract and move in.  The final number will depend on home and what the seller will accept.  Example: if you are looking at homes in the$100,000 - $150,000 range you can expect option fees approximately between $3,500 - $10,000 (keep in mind your option fee is applied to the purchase price when you buy the home and the more you put down the smaller your loan amount will be.).

  •  How's your score?  Although perfect credit is not required by any means, it is important to know what your score is today to guage realistically how long it can take to improved your score in order to qualify for a loan during your lease? Rent to Own buyers generally need  a minimum of 620 or higher in order to qualify for  most FHA financing programs.  Other rent to own buyers are looking to push their scores even more to 750 or above so they can obtain the best rates possible before they buy. Most of our lease option buyers who work with our credit coach partners are plesantly suprised to see major credit score jumps as much as 30-60 points in a matter of a few months.  Understanding how the credit bureaus work and knowing how to improve your score is crucial to your success. Once you have your credit game plan in place and begin to follow it, you will be able to qualify faster and lock in today's great interest rates sooner than you ever thought possible!  Not sure what your score is? No problem you can use any service you'd like to get your score, but we've have found Citi Identity Monitor to be the best low cost site to get your credit report and accurate tri merge credit score, (just like mortgage brokers use) for just one dollar.  Make sure you cancel within 30 days if you don't wish to utilize their monthly monitoring service.

  •  Are you shopping in the right price point for your future home?  Ok now that you have your credit score, have you checked with a mortgage professional to see if you will be able to afford the monthly payments upon reaching a credit score that will qualify you to buy?  For Example: If you wanted to keep your payments around $1350-$1500 a month you should look at homes with a purchase price of around $250,000 or less, as you would not want to lease option a home selling for much more, since your mortgage payment includes principle, interest, taxes and insurance (aka: PITI) could be much higher when you purchase. The price point you should be shopping in is based on several individual factors, your debt to income ratio; how much you plan to put down and the monthly payment amount your comfortable with.  We always recommend each of our 'future buyers' speak with one of our mortgage partners as they will be able to let you know what price range you should be focusing on.

  • Do you know how long it will take to qaulify for a loan?  After you have had and opprotunity to speak with our mortgage and/or credit coach partners, you should have a pretty good idea of how long you'll need before you can get financing.   We'll need this information upfront in order to negotiate an appropriate lease term length and most rent to own sellers want to know you have your game plan in place to complete a successful sale in the future. Once you decide a Rent to Own agreement is right for you and you've complete the nessesary steps, call us to set up an appointment  to view any of the homes from our inventory of properties, Once you've found a Rent to Own home you wish to make an offer on, you will work with one of our Lease Option Specalist Agents to present a Lease Purchase offer to the seller. When your offer is accepted, you will then Lease your new home for a period of time, while you work towards obtaining loan approval. During your lease term, we recommend you continue to work with a credit coach until you have reached your desired credit score.  Once you've hit your target number we encourage you to speak to one of our trusted mortgage professional to start shopping for a loan.  After you have loan approval you may purchase the home anytime within the agreed upon lease period.
     
I am renting a home now. Why would a lease option program be better for me? 
Honestly, renting may make more sense for you. It truly depends on your goals and desire to be a homeowner.  We are happy to help you evaluate what's right for you. Renting a home is the financial equivalent of paying off your landlord's mortgage.  Our program makes your monthly payments work for you to help you purchase a home, as opposed to just throwing money away each month and having nothing to show for it.  With our Lease Option Purchase program, each month moves you closer to your dream of homeownership. 
 
How long does the move-in process take?
If we have a vacant home in our inventory it may only take 1 to 2 two weeks to move in. However, on average, if the sellers need to move out first it can take about 30-60 days to arrange a move in date.
 
What are my costs?
Our service is free to Rent to Own buyers. Other costs like your option down money and monthly lease payments will vary from home to home determined by what agreement you and the seller reach.  Each home will be different and what each seller will accept will be diffrent.  We work with you to get you the best terms and will help both the buyer and the seller facilitate a smooth successful transaction for everyone!
 
How much do I need to move in?
Rent to own option down payments are negotiable, but most homeowners typically require 3.5% - 7% upfront as a Lease Option fee to move you into the home. Some owners are willing to accept less option money or will work out terms, for instance if you don't have the full amount needed upfront some sellers may accept a higher rental rate for a period of time to make up the difference.  
 
Is the Lease Option fee payment refundable?
No. The lease option  fee is a commitment on your part that you will, at an agreed upon date by all parties, buy the home.  If you break the lease or do not pay your monthly lease payment, you forfeit your lease option money.  However, when you buy the home, your lease option money will be credited off the purchase price of the home.
 
What other methods of Lease Option funds are accepted?
You may also be eligible to withdraw or borrow from your 401K to purchase a home without penalties. The option down payment may also be gifted to you by parents, your favorite grandparent, aunt or uncle!
 
How long is the typical Lease Option period?  Can I buy it sooner if I want to?
Typically you have 12 to 18 months, perhaps 24 to 36 months in some situations (for instance if you are rebuilding your credit after  a short sale or forclosure), before you would need to complete the purchase.  However, you may exercise your right to purchase at anytime within the length of the agreement. You do not have to wait until the end of the agreement if you meet the qualifications to obtain a loan sooner.
 
Is my price for the home pre-determined? 
Yes. The price of the home is agreed upon at the time you sign the Lease Option Purchase Agreement.  Market conditions, price fluctuations, or neighborhood values will not effect the agreed upon price.  The price stated in the Lease Option agreement is the price both parties agree to accept when the agreement is executed.
 

At Bloom Realty, we believe we're able to go beyond just listing and selling real estate, to create real opportunity.  There's a difference.  Our Lease Option Program ... Read more

"I was very pleased with the terms, but most pleased with the fact that I am a home owner and not a renter. Joi has helped to put me on a path to repairing my credit so that I can get my own financing within the next two years, maybe sooner. Not only did they sell me a home, but I’m improving my credit score in the process. Joi, you have a customer for life."

Lidelle and Hiram B., Riverside
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