Newbie Question
Hi all. I am just starting to learn the very basics of REI and am puzzled by one nagging question that I am sure has a simple answer. My credit score is low (it sucks) and my fear is that if I offer a lease/purchase option to a seller, is that he will ask to see my credit report. I figure that since he is keeping the mortgage in his name and relying on me to make the monthly payments until I can get a tenant/buyer into the house and cash him out at closing, he will want to see it, won't he? Do I just dump the deal and walk?
I am sure that some of you have run into this scenario, haven't you?
Thanks for any replies.
Charles Vance
:-?
1. With a L/O you are renting. Landlords expect a lower credit score. They want to know you will pay the monthly bill but they are not looking for perfect credit.
2. If you have a decent deposit then they will care less about the credit score. That is your problem.
3. If you score is bad and they know what they are doing they might be figuring that when the option is close to expiring you will still have credit issues. You will not be able to finance the purchase and the option will expire. They keep the option money, you are out of the deal and they get to re-market the property, collecting more option consideration. They might even come back to you and say that for more money you can have a new option as a new, higher price.
Bottom line is the credit is a factor but mostly for you and not the L/O landlord. Vulture L/O landlords look for people with bad credit. The option will be short (1 year or so) and they know the person on the other side will never be able to pull off the purchase if it requires finance.
It can be a great deal for you if you know what you need to do when it is time to exercise the option. You get in now to a home you want and get time to sort out things while living there. Just know what you are doing.
John
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Charles- I use this technique alot and have never had anyone ask about my personal credit. Don't hesitate, just do it. If it comes up then you'll have to deal with it accordingly.
Thanks to you both. I feel alot better about it and now it doesn't seem to be a "roadblock". Guess I am out of excuses and should get ready to take a deep breath and take the plunge.
I am sure I will be posting more and more questions.
Thanks,
Charlie
:-D
Do not let credit become a road block. Focus on the solution and the ability to pay.
Eric & Rosa
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