What is seller carryback owner financing lease option and rent to own,and how do i buy a home with bad credit

Seller Financing is when you buy a home and get your loan from the seller instead of from a bank. Once you buy the home, instead of making your monthly payment to the bank, you make your monthly payment to the seller. Seller Financing typically occurs when you want to buy a home but cannot qualify for a bank loan. The concept is the same as if you were getting a bank loan, but with seller financing the process is much quicker, and the qualifying is much easier.

Do I qualify For Seller Financing?

When evaluating a potential buyer, we look primarily at income, work history, and rental history. If you have a decent job, and your income is at least three times the monthly payment on the home that you are buying, and you have the money for the down payment, then you have a good chance of getting approved. We do not require a specific credit score or debt to income ratio.

If you are interested in buying a home with seller financing, you can get started with the qualifying process by filling out this simple form.

How much will my down payment be?

Each home has different requirements. You can see the financing details on the listing pages for each home. The down payment generally is a minimum of $4,900.

How long will the seller provide financing?

Seller financing is meant to give you time to get your credit in order so you can qualify for a bank loan. We generally give you at least five years to get everything straightened out. In some cases, after the five years you have what’s called a “balloon payment”, which means you have to pay off the loan to the seller. This is generally done by refinancing with a traditional bank loan.

What document do you use for the seller financing?

We generally provide seller financing through a document called a Lease Option, in which case the transaction is often called a Rent-To-Own. In some cases we use a document called an Agreement For Sale, in which case the transaction would be called an Installment Sale.

What is the difference between a Lease Option (Rent-To-Own) and an Installment Sale?

From your perspective as a buyer, there is not much difference between a Lease Option and an Installment Sale.
•In both cases you are buying the home without getting a bank loan initially.
•In both cases you are paying a certain amount down (through the down payment or option fee).
•In both cases about the same portion of your payment goes toward the purchase of your home every month.
•In both cases you have a specific time frame in which to qualify for a bank loan and pay off the remaining balance owed.
There are some differences but mostly they do not make any difference to you as the buyer. The differences include the following:
•The money you pay up front in an Installment Sale is called a down payment. The money you pay up front in a Lease Option is called an Option Fee.
•In an Installment Sale, a portion of your monthly payment goes toward principal and a portion goes toward interest. In a Lease Option, a portion of your monthly payment goes toward rent, and a portion goes toward your future purchase.
•In an Installment Sale, you will get what’s called equitable title to the property. In a Rent-To-Own, you do not get title to the property up front; instead, you have an option to buy the property at a specified price within a specified time frame.
One difference that may matter to you as a buyer is that in an Installment Sale you can deduct the mortgage interest on your taxes. However, that would only matter to you if you are paying enough interest to itemize your expenses on your tax return. Talk to your tax advisor to determine if it would make a difference for you.

If you prefer an Installment Sale over a Lease Option, we are willing to do either one, but in an Installment Sale the required down payment is generally quite a bit higher than in a Lease Option.
www.creativeazfinancing.com for service in the phoenix valley wide market Robert HiGHSMITH rEALTOR WWW.ROBERTHIGHSMITHREALTOR.COM 480-250-8020

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