Lease to own programs - A financing option that allows low and moderate income buyers to lease a home with the option to buy. Each months payment includes principal, interest, taxes, and insurance (PITI) on the first mortgage, plus an additional amount that accrues in a savings account and is used for a down payment.
Often when you are ready to purchase the house the lender will look at the loan as a refinance rather than a purchase. This is because you have now acquired an interest in the home.
Lease Option programs are great for borrowers with no credit or bad credit. This program allows them to get into a home without being approved for a conventional mortgage. The buyers usually pay a option upfront to buy the home before or at the end of their lease term. The lease agreements usually contain a provision where a percentage of lease payments will be applied toward purchase price. At the end of the lease term, the buyer has the option to purchase the home at the agreed upon price.
There are different types of 100% loans. You can
either get 1 loan for 100% or an "80/20" loan. Speak to your mortgage
professional to see which program is best for you!
