Much like test-driving a vehicle, renting to own is an excellent way to try it before you buy it. Purchasing a new home is a leap of faith. The actual estate agent can’t know whether the neighbor’s teenager always has parties on Saturday nights, or if another neighbor’s dog barks all day long during the work week because it is left alone. If you rent to own the home, you can reside in the home for a few months or annually and decide if it’s where you really want to live until you refinance into a conventional mortgage.
Determine in the event that you genuinely possess a rent-to-own mortgage or a rent-to-own rental. Rent-to-own mortgages are called property contracts, and the purchaser does not actually rent the property. The seller financing the cost of the home without altering the labeled ownership of their property. The name changes to the purchaser only when the property contract is refinanced, and any liens on the property which the seller owes are paid in full when the home is refinanced.
Supply your mortgage creditor with a copy of your property contract and be ready to provide canceled checks Maintaining your payment history. Lenders scrutinize land contract refinances carefully. While each lender has its own rules, many won’t refinance property contracts which are less than 1 year-old. They’ll require the house be funded as a purchase rather. If the lender believes the transaction for a purchase, the purchaser may have to provide extra funds for a deposit.
Get all additional documentation required by your creditor to your new loan. The lender will require income documentation such as pay stubs, W-2s and possibly tax returns. The creditor may also require bank statements if funds are needed to close, or so the loan application requires documenting some economies. Forward these documents to your lender as soon as possible.
Stay in contact with your lender during the procedure. Your lender will require extra items or wish to schedule an assessment of the home. All of these are normal and customary things required on each loan. If your creditor requests any extra documentation, such as extra pay stubs or letters of justification, provide them as soon as possible. Work with your lender until the loan is fully approved and your loan closes.