Lease Purchase Question..again!!!!!!
Ok..say I have entered into a lease option with an investor. I sub lease it to another qualified tenant. The time is up and now it is time to excerise my right to purchase. At that point do I get a conventional loan?
I still do not want to live in the house. I am hoping to sell for a profit later after the rental agreement with the tenant is over. Is that the way it goes n this situation?
~Chantelle
Yes, you want to exercise your option and would need to find the money to do it. Conventional or non-conventional is up to you and your circumstances.
I forgot to add that it was 10% down using the lease option. Do I again have to come up another down payment to get another loan?
Depends on what your contract w/ the investor states, but in most instances, no you would not have to come up w/ add. down payment if you qualify for 90% financing.
A 90% non-owner occupant (investor) loan is relatively easy to obtain.
I just want to be clear that you have the right to exercise your option at any time up to the termination date of this option.
Make sure that you follow the procedure setforth in the option agreement-such as proper notice to the optionor(seller).,etc.
Instead of the hassle of getting a loan on the property, why not just sell it to the tenant at the end of the term. They get to stay in the house, own their own home, and deal with the hassle of getting their own mortgage. Offer them an insentive like a $100.00 credit each month the rent is on time towards the down payment. You get the rent on time and they get some money to put towards the down payment on the house. Use their good payment record to help if they have credit issues.