Buying A Home
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Any advice for a rent/lease with option to buy?
We are in love with a certain home in our tiny town. It's an earth berm home, so unique. We haven't been able to secure 30 year fixed financing for it so we walked. The owners haven't been able to sell it, so they approached us with this option to see if we were even interested. I told them we would be, but to give me some definite terms to work with. What would be common in situations like this anyhow?
Re: Any advice for a rent/lease with option to buy?
Why can't you secure financing? I would clear up those issues before agreeing to a rent with option to buy.
Make sure you understand ALL remifications of a least to buy and be sure to have a lawyer review any paperwork prior to signing.
This is not something I would recommend.
Consider also that the home will be more difficult to sell in the future.
Have you tried getting financing with multiple lenders? Shop around because other underwriters may be willing to work with other comps.
I totally agree with your husband in regards to sticking with a fixed rate loan. Mortgage rates are at their lowest right now, so it's the best time to lock in a low rate.
As far as the rent to lease option goes, I'm not sure about that. Hopefully some other nesties are knowledgeable on that matter and can give you some advice.
Wow! I don't know what their deals are with not doing a mortgage just because it's not a traditional house.
By the way, I didn't know what an earth berm was until I googled it today. They look really cool!
One thing to keep in mind is how difficult it is for you to buy this house. You will have just as difficult of a time selling it. So unless you plan on being here for many many years, I would move on and find another home.
ok... so this is a late response, but I didn't see any real answers. A lease purchase is typically constructed with a monthly payment that's broken into two buckets. One is the "lease" amount and the other is the "equity or down payment" amount. So for simplicity let's say it's $1,000 per month. You could offer $800 as rent and $200 as equity. After 2 years at this rate you would have built $4,800 towards the purchase price. The reason buyers do this is that it allows them to lock in the purchase price of a home (option to purchase) for a set period of time.
Another way to structure it is if 100% of the lease amount goes toward the purchase of the house. So for 3 years you pay $1,000 per month. With a purchase price of $200,000 you would have built almost a 20% down payment into the deal. Add $4K and you would be there.
A third option for your situation is seller financing. If they own the house for cash they could just write the loan for the house. This is a pretty terrible deal for the seller since they probably want the money sooner than 30 years, but it's definitely an option.
Call a real estate attorney. They will have recommendations for you on all fronts. Good luck!