Washington Home Solutions

I get asked on a regular basis what it takes to qualify for a lease option.  I know for many of you, the thought of throwing away money towards rent and abiding by the ‘rules’ of your landlord is painful.  ”Don’t paint the walls or have a bbq grill on your porch!”  So I’m sure you’re anxious to take the next step towards home ownership and are interested in jumping into a lease to own.  Great, I want to help you get there, but first I want you to ask yourself a few questions to see if you’re ready.

Do I have a STRONG DESIRE to WORK on becoming a homeowner?

Cleaning up credit dings, or saving up for a down payment is hard work, make no mistake about it.  You have to be so fed up with renting that you’re willing to work on the things that are preventing you from getting a loan.  It will require sacrifice to stick to a budget, pay down debt and build up a savings.  You may have to revisit some credit demons of the past to clear them from your credit report, and you may have to work some overtime or get a second job to make it happen.  There are ways that we can help with this, but it takes commitment.

Can you show income that is 3x the monthly payment amount?

As a rule of thumb, most lenders will want to see that your gross income is at least 3x what the monthly payment on the house is.  Also, they want to see a track record of you making the payment on-time during your lease.  So, we need to follow the same guideline for the lease option.  You may be able to afford the $1200/mo payment on an income of $2600/mo, but a lender would only qualify you for about an $866/mo payment in the future when you go to get a loan.  That would be an unpleasant surprise and we don’t want to see that happen.  Our entire goal is to set you up for success, plus, having the extra income is what you’ll need to pay down extra debt and save up additional money for a down payment.  The average monthly payment on most of our lease option homes is between $1000-1500/mo.  Therefore a total gross household income (before taxes) of $3000/mo or more puts you in good position to qualify for our program.

Do you have money available for to pay the upfront option consideration?

To ultimately qualify for an FHA loan, you’ll have to accumulate a 3.5% down payment on the house.  We want  you to get started with about 1 or 2% upfront when you start the lease and we help you to accumulate the rest through the monthly purchase credits that we offer.  With our ’sweat equity’ homes, you can expect the lower end of that range, and on the move-in ready homes, expect the higher end of that range.  If you don’t have money for an upfront payment, start saving now.  We even give you the ability to earn cash (up to $2500) by referring buyers to the properties that we advertise, so you can save up even faster.

Have you started the process towards building good credit history?

Credit is one of those things that can be hurt in an instant, and can take months (or years) to clean up.  Having derogatory marks on your credit does not disqualify you from a lease option (that’s what lease options are for), but we would like to see that you’ve already started to show a recent history of turning things around.  In other words, if you are currently 30,60 or 90 days late with any of your debts, we’d want to see you catch up the payments on those obligations and start making on-time payments again before asking you to put down money on one of our homes.  If you haven’t had your credit pulled in a while, I’m in the process of creating a video that I’ll post which will show you had to pull your own free report online without having to sign up for a paid credit monitoring service, and without the inquiry showing up on your credit history.  Stay tuned.

So, what happens if you’ve gone through the questions and you’re not quite ready?  That’s ok, there’s not a big rush.  Just make the commitment to yourself that you’ll start chipping away at the challenges that you have and by all means, let me know if you need some guidance on where to start.  That’s what I’m here for.  Also, keep an eye on this blog and our Facebook fan page for tips on preparing for home ownership.

If you’re ready to go right now then let’s make it happen.  You can see our current homes available on lease option at our website or tell us what you want if you haven’t already done so.   If you have any other questions or comments about qualifying for a lease option, feel free to submit a comment below.

Mike

P.S. – I have lots of big things in store for you in the future, so to stay in touch, make sure you add us to Facebook (scroll up and check the sidebar on the right).

The following is extremely important!  HUD has proposed to eliminate seller financing unless the seller lives in the home or becomes a licensed mortgage originator.  This affects all homeowners and homebuyers (even if you’re not an investor) because it restricts one of the most important tools that a seller and buyer have to create win-win transactions, and can further hurt property values and chances for a recovery.

How YOU can help:

Real estate investors, home buyers and home owners across the country need to go on record with HUD on this issue. Please review the proposed law and submit your comments to HUD. We have until March 5th (extended due to public response) to flood this system with comments.

Follow these simple steps:

1. Visit www.regulations.gov.  Select document type “Proposed Rules” then as keyword enter “FR–5271–P–01″ or “safe mortgage” and search (or use direct links below)
2. Review document as you need
3. On the right of the next screen, click on “submit comment”
4. Complete the form providing required info, your comments and submit

Or use these direct links:

FR–5271–P–01

SAFE Mortgage Licensing Act:

HUD Responsibilities Under the SAFE Act

(Document ID HUD-2009-0155-0001)

• Document Details HERE
• Submit a Comment by March 5, 2010 HERE

What do you say?

Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that sellers can originate and service loans on any property they own, whether it’s a principal residence or not.

Make your voice heard!

Mike Sumsky

I had a quick thought today and was hoping to get your opinion.  As you’ve probably heard on the news, there are a lot of bank-owned homes on the market right now, and investors are buying them cheap….well below assessed value.  I know, because that’s what we’re doing as well.

The problem is that most of these homes require a cash buyer or someone who is well-qualified for a loan, which means that if you have some credit dings, you’re out of luck in taking advantage of the incredible opportunity now….which brings me to my thought.

I’m interested in working with a few people who would like to do a ‘lease to own’ on homes that we buy cheap from the banks.  Most of them will require some fixup (anything from carpet and paint, to a complete remodel), but you’d benefit by getting a great price.

What I’d like to know is, would you be interested in leasing to own a house that you can put in some ’sweat equity’?   I’d still need a small down payment, but it would be much less than we normally charge.

If you’re interested, Fill Out Our Form and tell us what kind of property you’re looking for.  In the last comment box, mention that you’re “Interested in a Bank-Owned Lease Option Home”.  Also, let me know what type of fixup work you’re willing to do, for instance:

- just cosmetic fixup (carpet/paint/cleaning)
- intermediate fixup (kitchen/bath remodeling)
- advanced fixup (roof replacement/structural/electrical work etc)

I’m trying to gauge interest, and I can only have the ability to work with a few people, so if you think this might be something you’d like to do,  Fill Out Our Form

3 Bedrooms, 1.5 Bathrooms, 1426 sq ft Mason Lake Waterfront.
This home fronts the marina/park at Paradise Shore Estates on the east shore of Mason Lake.
With unobstructed views of the lake and marina, you will enjoy sunsets from the patio or from the beautiful Lindal Cedar SunRoom

To qualify, you Need:

$7000 down (100% of down payment is applied to purchase)
$1695/mo payments ($200/mo is applied to the purchase)
$349,000 purchase price in 12 months.

If Interested in this home, call
Mike or Holly 360-874-1560

On Friday, HUD Secretary Shaun Donovan announced a temporary policy that would allow FHA-mortgage insurance on homes that have been bought and resold within a 90-day period.  The current regulations have prevented many would-be home buyers from purchasing many HUD-owned properties, bank-owned properties,  or properties sold through private parties unless they’ve sat for more than 90 days.

This is great news not only for homebuyers, but investors too.  Real estate investors and rehabbers have been vital to the real estate recovery, purchasing and rehabilitating properties which have sat vacant and often vandalized after foreclosure.  Oftentimes, the process of buying, fixing and re-marketing the home occurs in a period much faster than 90-days and this will allow a much larger buyer pool and give many first-time homebuyers access to these properties.

The new policy will go in effect on February 1, 2010 and will remain in place for one year unless it is extended or withdrawn, and the waiver is limited to properties which meet certain general conditions such as:

• Sale must be an arms-length transaction
• If the property is re-sold for more than 20 percent of the purchase price, the resale price must be justified because of improvements made or other justification given by an appraiser.
• Only pertains to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for Purchase program.

More information can be found at the HUD website.

SOLD!!
For only $995/mo, you can “Lease to Own” this 2 bedroom, 1 bath condo and lock in the purchase price at a low $139,950.

This unit is in the Colony Square condominium community, which is a quiet complex with a gated entry. It features tile and wood flooring throughout, fireplace, lots of closet space, and a private balcony with a storage closet.

The complex also has a swimming pool, private cabana and is close to the new Sound Transit Link light rail system which can whisk you to downtown Seattle for a little over 2 bucks.

Water/sewer/garbage is included in your monthly payment.

To qualify, you need:

$3,000 down (100% of down payment is applied to purchase)
$995/mo payments ($150/mo is applied to the purchase)
$139,950 purchase price in 12-months (or extend for a 2nd Year)

3 bedroom, 2 bath with 1299 sq ft 3rd floor Condo in Tacoma, has cathedral ceilings, private balcony, new carpet and paint and is ready for you to move in and call home. It is in the Sunset Plaza community which has a gated entry, cabana with billiards table, swimming pool, hot tub and tennis court.

To qualify, you need:

$3,000 down (100% of down payment is applied to purchase)
$1100/mo payments, which includes HOA dues of $209/mo
$169,950 purchase price at end of lease option term.