Do I need to qualify for a loan to do a Rent To Own?

If you're looking to buy a home on a Rent To Own, Lease Option, Lease Purchase or even with short term Owner Financing, you may be asking yourself (or me), why do I need to call a lender if I already know that I can't get a loan and need to do something creative like a Rent To Own (or any of the other options I talk about). Great question!

Here is a short list of some of the reasons why you will want to qualify with a lender even if you know-like you've never known anything so certain before in your life-that you can't get a loan:

  1. The landlord/seller will want to know if you will be able to afford buying the house when you do qualify for getting a loan. A lender should be able to tell you this up front.
  2. If you're working with me to help you find a property, I will want to know the maximum payment the lender says you will be able to afford when you are able to get financing so I don't show you houses that you won't be able to qualify for or being able to afford the monthly payments for.
  3. The landlord/seller will often want to know (from a lender) the time frame before they'll be able to finance you. The landlord/seller will want to know how long they'll be renting to you before you can get a loan and buy (so we all know how long to put on the paperwork).
  4. The landlord/seller will often want to know what specifically needs to be done (from the lender) before the lender will finance you.
  5. The landlord/seller will often want to know who you will be working with to make sure that the things that need to be done to get you qualified for a loan are being done and a lender will often be that person or will refer you to the person or company that will help you get there.
  6. You may just end up qualifying now (and just did not know you could). This happens more often than you might think.

When I am approaching sellers to tell them you love the house and to ask them if they'll consider a Rent To Own, it is much better if I can say that you've talked to a lender, you will be able to get a loan for $X and be able to afford $Y per month if you just [insert solution to whatever is limiting your from getting a loan now] in Z months and that you just need a seller that is willing to work with us.

I do provide a list of lenders that you can speak with to get the answers to the questions above and set yourself up to succeed buying a home creatively (even if you don't qualify now for new traditional financing).

Creative Financing FAQs

Financing FAQs

Owner Financing FAQs

Rent To Own FAQs

Rent To Own, Lease Option, Lease Purchase