Why I Recommend You Lease To Own
Unfortunately not everybody is able to attain a mortgage. Even if they do, what if you're in an expensive market? That means your down payment can be $50,000 and you'll drain out all your savings. It's okay for some people but not for most people. A lot of Americans are living paycheck to paycheck.
Perhaps there's too much debt, maybe you're not getting a high enough mortgage even if you were to apply for one. What if your credit isn't good enough? Like I mentioned earlier, what if you don't have $50,000 to put down on a home? But where there is a will there's a way.
Lease To Own….
Some people disagree with me but I like to promote the least to own concept. With the least to own concept what you do is you sign a lease option purchase contract with someone else who buys the home on your behalf. You pay them rent and you have the option to buy the home from that company or investor within a year or so.
The Benefits…..
It's a great way to get your foot in the door while building up your money for a down payment. Sometimes getting a down payment in my opinion is not even worth it.
The Con….
If you are an everyday working person and you dream of having this four bedroom house in a nice neighborhood that's awesome but it comes with a price.
If you're in an expensive Market such as Orlando, FL, is it best to save up at least $40,000 because median home prices are $500,000. If your household income is $80,000/year are you willing to save up $40,000 just to drain it out on a home down payment? Will you have money left over for other expenses?
Why not partner with a company such as Divvy or Home Partners of America, have them purchase the home for you and rent it out from them with a lease option contract? At least your foot is in the door in regards to homeownership.
Even though your monthly payment will be higher than usual, that money goes towards your down payment if you ever decide to buy the home from the company or investors. I prefer that than to drain out my savings just for a four bedroom home? It's not like the toilets are made of Gold.
In My Opinion…
At least option contracts are a great way to get into the world of home ownership without having to spend an arm and a leg for the down payment.
Especially in a seller's market where there's people that will outbid you by $10,000 or $20,000.
Think about all the time you invest to make extra money not only to make ends meet but to save up for your down payment and to have a drain away. Maybe I'm wrong but I would rather not do that. Because now your mortgage is going to be for 30 years. Do you have a game plan or is your money High enough per month to make it worth it? Are you going to have a lump sum of money coming in to put towards the principal of your home. If not then why would it make sense to spend $50,000 on a down payment. I'd rather get a home while having another $30,000 saved up for expenses.
Getting a mortgage the conventional way is not the only way to get into the world of home ownership. Partnering with a company like Divvy or Home Partners of America can help you. Feel free to reach out to me if you have any more questions.