The national average for option consideration on a L/O is 5 percent, so I look for a T/B who has more than that. I know that I will then have a serious Buyer that I can help to close. So, what do I look for? A large down payment.
If the T/B has "Prince of Darkness' credt, how does just making 12 mo's of L/O payments get them to a B+? Do you have to do anything else to get their credit rating to an acceptable level in 12 months?
2. I am still at a loss on T/B's. Even with a 540 rating and no $, a lot of Mortgage Brokers will place them with an 80% 1st and a 20% 2nd (at say 12%). So what types of T/B's do you get that can't get a conventional loan now, but can in 12 months?
[addsig]
I didn't say Prince of Darkness would have B+. Chapter 7 with reestablished credit gets B+ (only for the purposes of determining interest rate for this program). It's treated as a refi, and they borrow 90 percent.
It's not conventional. Far from it! The ones with decent credit may decide to go conventional after estsablishing residency. They have plenty of money to put down.
The national average for option consideration on a L/O is 5 percent, so I look for a T/B who has more than that. I know that I will then have a serious Buyer that I can help to close. So, what do I look for? A large down payment.
So a good mortgage broker has to be in place to get this deal done at the end of 12 months?
Most definitely. Although, some have decent credit and will go conventional (they just moved in town and need to establish residency first).
LeaseOptionKing:
If the T/B has "Prince of Darkness' credt, how does just making 12 mo's of L/O payments get them to a B+? Do you have to do anything else to get their credit rating to an acceptable level in 12 months?
2. I am still at a loss on T/B's. Even with a 540 rating and no $, a lot of Mortgage Brokers will place them with an 80% 1st and a 20% 2nd (at say 12%). So what types of T/B's do you get that can't get a conventional loan now, but can in 12 months?
[addsig]
I didn't say Prince of Darkness would have B+. Chapter 7 with reestablished credit gets B+ (only for the purposes of determining interest rate for this program). It's treated as a refi, and they borrow 90 percent.
It's not conventional. Far from it! The ones with decent credit may decide to go conventional after estsablishing residency. They have plenty of money to put down.
Where did you get the information about their bad credit? Did they tell you this verbally or have you seen a credit report?
What does their payment history look like for the past 1-2 years? What have they paid in rent for the past 2 years and have they paid on time?
I don't care so much about their past credit problems but I prefer to deal with people who have gotten their life back on track.
Find out some of this information and you'll be able to make a better decision.
GOOD LUCK