| HOME IN A WEEK | New Executive Homes in Atlanta |
LEASE PURCHASE
Frequently Asked Questions
What is a "Lease Purchase"?
An opportunity to lease a house with an option to purchase that house within a specified time for a specific price.
For example;
You have a lease to purchase a house for $300,000 in 12 months. This gives you the right to buy the house for that price anytime within 12 months.
How fast is the Lease Purchase process with Home In A Week?
Just that fast...you could move into your new home within a week.
What is the benefit of Lease Purchase?
You will lock in the purchase price of your home for a specific time in the future. If the house appreciates during this time period, it becomes your equity, your gain.
What are the factors in Lease Purchase?
Purchase Price, Option Down Payment and monthly payment.
Purchase price? What should I consider?
You need to make sure the purchase price is not artificially high. If at the time you are ready to buy, the
option price is more than the appraised value, you will have to come up with the difference in cash out of pocket.
How can I protect myself regarding the purchase price?
Ask the seller to indicate in the contract that if the house appraises for less, the appraise value would be the new purchase price.
Why do I need to have a down Payment?
In today’s environment, it is impossible to get a loan with no money down. If you don’t have a down payment aside, it may not be a good idea to buy a home until you have a cash reserve.
How much should I expect to pay for Option Down Payment?
Usually between 2.5- 4% of the purchase price.
Is the Down Payment refundable?
No. Therefore you need to make sure you are serious about buying your new home. Remember, if you move
out, the home is not new any more and it is more difficult for the owner to sell.
How much is the Lease Purchase payment?
Lease Purchase payments are usually less than mortgage payments and most owners
subsidize payments to entice new home buyers.
How much cash do I need for Lease Purchase?
Down Payment amount plus the first month payment.
How long is the Lease purchase contract?
Usually 12 months.
Can I Lease Purchase for more than 1 year?
Remember, the owners usually lose money on Lease Purchase payments and they want to sell ASAP. If they agree to a contract for more than a year, expect the monthly payments to be higher. Of course the purchase price shall be higher also, because you will have had more time to buy and the house will have appreciated in value.
What would happen if I decide not to buy?
You loose your down payment, but this loss will probably be much less than the money you would have lost if
you had purchased a home and were forced to sell it in less than a year.
Is the lease purchase transferable?
Most Lease Purchases are not transferable; however we shall consider the transfer for an additional option
down payment toward the purchase and approval of the new tenant’s financial ability to purchase.
What would happen if after the term of the contract I can not get a loan to purchase?
With most owners you loose your down payment and have to move out. However we have created a safety net for you. If you have paid your rent on time and have established good credit with us; we would owner finance the house for you. This would be based on the minimum required for owner financing. We would also consider the extension of the contract, but as we mentioned before for slightly higher purchase price and monthly payments. Using either one the options mentioned you would not have to lose your Down Payment.
The information contained on this page is for general use only. Consult your lawyer
or CPA for specific advice.
OWNER FINANCING
Frequently Asked Questions
What amount will Home In A Week will require to Owner Finance?
We have up to 100% Financing; however it requires excelent credit and good income.
How fast is the Owner Finance process?Between 2-3 weeks.
What is the interest rate?
Between 5.99% - 9.99% depending on your credit and amount of down payment
How do you calculate the payments?
Based on a 30 year amortization with a balloon in 5 years.
What would happen if I can not refinance in 5 years?
Chances are that if your payments are made on time for 5 years you will be able to refinance. However if this should happen, we can consider an additional one year term at Prime+2.
Remember you always have the option to sell the house.
Are there any prepayment penalties?
No. You can pay off your loan at any time with no penalty.
Can you provide assistance in aquiring a loan?
We can introduce you to a mortgage consultant who will work with you to improve your credit. The intention is to help you qualify for a loan as soon as your credit and your finances afford you to do that.
Do I have to get a loan from the mortgage company that you refer me to?
No. You can work with anyone that you want.
Do I need to complete a year of lease purchase before you owner finance the house for me?
No. Anytime that you have the minimum amount required for owner finance we shall owner finance. Let’s say you have given us $10,000 for Lease purchase. After 3 months a big bonus check finds its way to you and you want us to owner finance the house. If the minimum required is $22,000, all we need is an additional $12,000 to owner finance the house for you.
Why should I consider owner finance if my lease purchase monthly payments are less than my mortgage payment under owner finance?
Two great reasons; peace of mind of home ownership & tax benefits.
A lot of people want to own their home because of price appreciation and building equity.
Tax advantage of home ownership is one of the few benefits left for the ordinary Americans.
Consult your tax advisor regarding your specific situation.
Is Owner Financing Loan Assumable?
No.
What are the Closing Costs?
Closing costs are the costs related to purchasing a home. It usually consists of attorney’s fee, transfer tax, tile search, title insurance, loan origination fee, credit report fee, tax service fee, underwriting fee, recording fee, documentation prep fee, etc.
Who pays the Closing Costs?
The buyer pays between 1 - 3% of the loan amount based on his credit score and amount of down payment.
What is an Escrow Account?
An Escrow Account is an account held by the lender for the buyer to pay the third party expences which consists of property taxes, property insurance, Homeowner's association fees and private mortgage Insurance.
Do you charge PMI?
No.
Who holds the Escrow Account?
The lender.
How much do we need to have in Escrow Account?
The banks at the closing would require you to pay for one year of insurance at the closing to the insurance company and then they collect an extra 4 months of insurance and 6 months of property taxes.
Why do they keep this much extra money in the Escrow Account?
Because the property taxes are paid sometimes between August and November of each year and they need to have enough money to pay it when it is due.
What happens to the extra money in Escrow Account?
Think of Escrow Account as a savings account. Any extra money, more than the minimum required amount, is refunded to you on a yearly basis.
How often the payment is made to Escrow Account?
Your monthly payment includes Principle (P), Interest (I), Tax (T), Insurance (I) and PMI if any.
Is Escrow Account a fixed amount?
Escrow is fixed for a year, but changes yearly as taxes and insurance amount changes.