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is purchasing a lease to own home the best option if you have no credit history but are ready to buy a home?

Public Comments

1. It can be a good way, but you need to be careful as if you are late with a payment or can't get financing at the end of your option period, your deal can be cancelled. Also, you will have to pay an option fee which is non-refundable. If you simply have no established credit - as opposed to having bad credit. Then there are many first-time homebuyer programs out there. Check with local lenders and it would be a good idea to find a local Realtor who is familiar with such to assist you. A good realtor can lead you to lenders who can help you and show you homes which fit your budget. Todd
2. Also make sure that your payment goes toward the mortgage payment by making your checks out to the owner and the Mortage company so that the checks must be cashed by the mortgage company. Otherwise you can end up living in a house that is foreclosed on with no enforceable purchase option.
3. That sounds like a very viable option. Locking in the purchase price (hopefully a very appealing one) at today's price can be good. There are good benefits to doing this: 1. You won't have to move again when you purchase. This saves you hassle, money, and time. 2. You'll have time to get the credit "ball rolling." Get a few credit cards and establish good payment history. Use less than half of your credit limit on each. -also get utility bills in your name, and don't be late! -pull your credit and take care of any delinquencies, medical bills, etc. -in about a year you might be good to go!
4. A mortgage company feels secure in lending to a lot of people because they have equity in their home. Don't do rent to own! Talk to a reputable loan officer. If you have no bad credit or very little credit of any kind--they can work around that and you will not be stuck in a bad real estate deal. You will also be able to have your pick of a wider variety of homes rather than just the few where the owner wants to "Rent to Own".
5. There's nothing wrong with lease options if you have bad credit or limited income, but if you can get a conventional loan with a mortgage you can afford, you'll probably be better off. The truth is, 99.9% of all lease options DO NOT culminate in the purchase of the home. This is because on average, people move every 3-5 years and most lease options are about this length. So right when you're ready to buy the house, you're also ready to move. As a practice, we don't buy homes on lease option, but we do lease them out that way because we keep the option fee and monthly payments when our options are not exercised.