Posted by Eddie FL on February 09, 2000 at 16:15:28:
Dear Mike,
You can go to a bank, Mortgage broker or wherever you think you can get the best loan and tell them you want to get a loan to buy the place you are living. They will ask for a contract, which you have, ask you to fill out a loan app and qualify you for the loan. So, the answer is yes, you can go at anytime and qualify for the loan as long as it is within your term to purchase the property. If you Option expires, that is another story.
Posted by Mike Carroll on February 06, 2000 at 21:40:33:
I am wondering if someone would clarify this for me: While on a, say 3 year lease option, can you get a mortgage on the property before the lease option is up to pay the seller the predetermined price? And of the topic, while going thru the Sheets course, I understand financial concepts easily (well the numbers at least), but the simple things like where to get a note and stuff gets me. If I was in a lease option like above and say had determined a predetermined price of 65,000, during the 26th month for example, could I just walk into a bank and say “I have a lease option on this property for 65,000 (which btw is worth 68,000 now), I would like an 80% mortgage loan to buy it from the seller.”(I would only have to pay 65,000-whatever I payed in the rent spread). Is this how it works?
Posted by rowe111 on February 25, 2000 at 17:00:49:
When you are ready to exercise your option, you can apply for mortgage of your own. By providing the lender a copy of your lease option agreement, they can verify how much you have given the seller towards your downpayment. If your down payment is equivalent to the 5% or 10% required downpayment you will not need additional down. However, if short, you may be asked to bring in the difference. And of course, don’t forget your closing cost.
eddie- that is not how it works. Only the portion of your rent payment that exceeds fair market rent can be credited towards your cash investment. You could get a mortgage on the property before the lease was up, but not at 80% loan to value.( you could actually refinance the property) In order to get a mortgage at 80%, you would need 20% in cash or equity, hence you are only borrowing 80% of what the property is currently worth.( equity is the differenc between what is owed on the property and what it is worth). Hope this info helps you!