Lease Option Financing In Florida
i'm having difficulty obtaining a mortgage by using my lease option. I've executed my option and want to do a cash out refinance because I've put over $150,000 into the property. However, most lenders will not allow me to use the lease option as a refinance, but want me to do it as a purchase, thus not allowing to take cash out. Any suggestions on how to get a lender to accept the lease option with12 months history and allow me to do a refinance v a purchase? It's a 600000 loan, which is another deterrant.
The point is a lease option is not a financed mortgage and a lender will not consider it as a refinance since your agreement does not follow with a mortgage related agreement.
No lender will consider a refi, as it does not apply.
Not knowing what the loan to value would be, what type of credit you have, how you made your payments and your proof of income it is hard to say how to get the lender to take a look of your offer!
[addsig]
There are a few lenders willing to treat the lease option as a refinance. It is the fact that the loan amount is over $500,000 that throws them off.
Wellingtoninvestor,
you said you have executed your option, which would mean you PURCHASED the house, and now you have title VS. you being IN THE PROCESS OF executing your option to purchase but still making lease payments.
Could you clarify which one of these applies to you? Also... you put $150k into the property while you were leasing it?
Are you wanting to use the 12 months timely lease payments (I assume) to further strengthen your refi terms?
Let us know, Dave
[quote]
On 2004-09-22 11:13, davehays wrote:
Wellingtoninvestor,
you said you have executed your option, which would mean you PURCHASED the house, and now you have title VS. you being IN THE PROCESS OF executing your option to purchase but still making lease payments.
Answer: I have notified the seller I wish to exercise on the option. I have no other lease payments to make. It was a 14 month lease.
Could you clarify which one of these applies to you? Also... you put $150k into the property while you were leasing it?
Answer: Yes, because I knew I would be executing on the option. Most of the improvements were completed by myself.
Are you wanting to use the 12 months timely lease payments (I assume) to further strengthen your refi terms?
Answer: Yes, exactly. $500.00 a month went towards the purchase price. The purchase price is $499,000. The payoff is $480,000.
Thanks, Dena[ Edited by wellingtoninvestor on Date 09/22/2004 ]
Hi, thanks for your responses. What is the appraised value of the property? Has an appraisal or BPO been done recently?
Assuming it is worth $600k, and you now owe $480k to your investor / optionor, aren't you already upside down by $30k, if you put $150k into it? HOw could you pull cash out of this deal, even if you did get a refi loan?
thanks, Dave
Appraisal came in at $750,000
I have had a lot of success using HELOCs. maybe just buy the house and then use a low intrest HELOC 2nd to free up your money BankOne does them but the like to nickle and dime you to death. and Washington Mutual will do a HELOC with no seasoning of title requirements. I actually have 2 properties using a WM HELOC as the first (and only) mortgage. The seller Quit claimed to me and I refied at WM. When the selled Quit claimed to me I signed it back to them via QC and they held that paper untill I payed them off, and then surrendered it to me. it worked really well.
Josh
[addsig]
Using a HELOC sounds very creative. However, I am self-employed and have a few bumps on my credit over 24 months old. I don't think I'll qualify for a HELOC for a year or two. I know they are pretty strict on credit history. My score is 666. But again, the derog remarks are there and not going anywhere for another two years or so.