Florida Rent to Own Home -- Home Financing Secrets Revealed

What You Don't Know About Getting Your Own Home Loan Could Cost You An Extra $169,116.81!

Florida Rent to Own Home | Lease Option Florida Home

If you have good credit or damaged credit, read this report before getting your own home loan. Know exactly what you are doing and how your decisions about a home loan will affect your family's financial future.

The American Dream of home ownership resides in all of us. We all want a nice home in a nice neighborhood for our children to enjoy with friends and family. We want our own backyard...our own garage...our own paint colors...our own real neighborhood for our children to enjoy with their friends.

We want our own American Dream, a place we can call "home" and a mortgage that is ours.

We all know what we want – that is the simple part.

The real challenge is discovering how to get what we want without having the wrong home loan program haunting us for years to come.

Therein lies the challenge.

Smothering us are people who claim to know what is best for us: Realtors, loan officers, mortgage brokers, and rent-to-own home specialists. They all claim to have the answer for us about financing our new home.

How do we know what is really best for us when pursuing home ownership? To whom do we listen for advice?

The answer to your question is …?

The answer is that you should listen to all of them. You are pursuing your America Dream and the paper you eventually sign will encumber or make you responsible for hundreds of thousands of dollars for many years.

This is a huge decision and is by no means an easy or simple process. You should not complete the learning process in one weekend or with only one source of information.

Do not automatically believe that the "best" way for you to purchase your new home is the traditional way by getting a loan officer or mortgage broker to get you approved for a terrible loan program, telling you that this is the only way for you to get your home.

You really do have options for purchasing your new home, without getting hammered by a mortgage on which you will pay dearly for years.

Options exist, and this free report will present some important considerations for getting the keys to your new home without taking a loan with an outrageous interest rate, an equally outrageous down payment requirement, and obscene fees for closing the loan with damaged credit.

How bad can a "terrible" loan really be?

If your situation varies slightly from the items below, you will pay dearly for the privilege of getting your own loan right now. If your situation varies a bit more toward the "bad/ugly" side from the items below, you will suffer an even worse loan. Consider the following factors before signing the mortgage paperwork for your new home:

Is your middle score from Equifax, Experian, and Transunion a 620 or better?

Without a 620 or better credit score, a loan officer or mortgage broker will shop among "B" or sub-prime lenders for a mortgage supporting your damaged credit file. For some lenders, you must achieve a 680+ score in order to meet the "A" lender credit score requirement.

Are your debt-to-income ratios in line with Fannie Mae or the Freddie Mac benchmark ratios, i.e. 41%?

What this means is that underwriters for conventional lenders generally utilize Fannie Mae or the Freddie Mac benchmark ratios. Loan underwriters will allow 41% of your total monthly gross income to go toward all expenses including housing, medical payments, judgments, collections, child support, auto payments, credit cards, etc.

For instance, your monthly gross family income is $6,000 or $72,000 gross income per year. Your monthly debt, not including groceries, utilities, or entertainment, equals $586.00. Total monthly obligations divided by monthly gross income must equal 36% to fall within Fannie Mae Standard Eligibility Guidelines.

The amount of monthly housing payment this formula claims you can afford is $1574.00 (principal, interest, taxes, and insurance). For example, let's say your gross monthly income is $6,000. We multiply your $6,000 (gross monthly income) x 41% (allowable debt) and that gives us $2,460 in monthly allowable debt.

We now must deduct your $586.00 in monthly debt from the $2,460 and the resulting $1,874.00 is the maximum monthly payment allowed by the lender.

Generally, the "better" loan programs adhere to Fannie Mae Standard Eligibility Guidelines for underwriting the loan and determining risk to the lender.

However, many other loan opportunities exist, and that defines the value of a mortgage specialist -- your mortgage specialist must ask you lots of questions to find out exactly how long you envision living in your new home and what you believe your future earnings potential will be. By asking the right questions, listening carefully to your answers, and knowing the requirements of various loan programs, a mortgage "specialist" can recommend the most appropriate loan program.

Do you have a pretty clean credit report?

Underwriters prefer a clean credit file complete with a minimum of three "seasoned" trade lines, i.e. or described as open and active credit lines. When your credit file shows blemishes such as "Lates", "Collections", "Chargeoffs", etc, that negatively effects your chances of getting a loan, let alone a decent loan.

Do you have at least two years’ same industry work experience?

As you can imagine, loan officers, mortgage bankers, and mortgage brokers prefer the "vanilla" files -- those files with clean credit, W-2 verified income, verified assets, and stability in the work place. The more your file deviates from what underwriters want and hope to see, the more challenging your situation becomes for getting the loan -- rather, the best loan -- you can get for your new home.

Do you have W-2 earnings?

Underwriters prefer you verify all aspects of your file when applying for a mortgage. Of course they do. They want a clear picture of the risk involved in lending you hundreds of thousands of dollars for a home.

Therefore, they prefer verified everything -- verified income, verified debt, verified assets, verified employment, verified EVERYTHING.

The more you are able and willing to verify to the underwriters' satisfaction, the better chance you have of getting what you want -- a quality mortgage with a very competitive interest rate and little out of pocket money.

Do you have at least 3% cash for closing costs, i.e. a home purchased for $250,000 requires approximately $7,500 in closing costs paid by you in cash at closing on your new home?

When a person buys or sells a home (or any real estate for that matte), both the buyer and the seller must pay closing costs.

The buyer's closing costs generally include stamp tax on the deed, stamp tax on the mortgage, title insurance, loan origination fees, discount points if buying a lower interest rate, and mortgage broker's fees.

Unless you are able to roll closing costs into the purchase price, which means the seller must allow it and the appraisal must support it, you will have closing costs amounting to approximately 3% of the purchase price of the home.

Do you have $7,500 in cash needed for closing costs?

Do you have at least 10% down payment for your new home, i.e. a home purchased for $250,000 requires $25,000 paid by you at or prior to closing on your new home?

Unless you pursue an "exotic" loan program, i.e. ARM, Interest Only, etc., you will probably need to invest some down payment money in order to satisfy the requirements for most loan programs.

The "no money down, bad credit" loans generally tend not to be nearly as great as they sound. Often, they come with lots of small print considered dangerous by prudent people.

In most cases, lenders require at least 10% down payment or $25,000 on an average $250,000 home.

Already, you're looking at $32,500 in money needed upfront in order to qualify for the loan program.

Do you have $32,500 to close on your new home?

Are you prepared for an interest rate above 9%?

Unfortunately, you will face an obscene interest rate perhaps above 9% if your credit file is at all damaged.

Have you ever seen an amortization schedule before?

People with damaged credit are considered high risk by lenders. Therefore, if you are able to get a lender to approve you for a loan with damaged credit, you will pay unbelievably for it for 30 years.

The following chart clearly reveals just how painful it will be for you to suffer with such a loan even if you can afford the monthly payment. The chart considers you are able to show up at the closing table with $25,000 + approximately $7,500 in closing costs on a home priced at $250,000.

Purchase Price Down Payment Interest Rate* Total Interest Paid Total Amount Paid

$250,000 $25,000 9.5% $456,091.91 $681,091.91
$250,000 $25,000 6.5% $286.975.10 $511,975.10

*The interest rate utilized in the comparison is not an Annual Percentage Rate, meaning it does not account for "junk" fees lenders add to the loan amount.

With damaged credit, lenders will hammer you hard for your damaged credit and the penalty is great.

Are you prepared for an unstable and potentially dangerous loan with a two-year pre-payment penalty, meaning the lender will penalize you if you try to finance out of the "terrible" loan prior to two years despite your improved credit?

Damaged credit and other "undesirable" factors such as no W-2 income, no two-year same industry work experience, no big down payment, no closing costs, and/or a recent divorce, bankruptcy, foreclosure will greatly reduce your chances of even getting your own home loan, regardless of the rate and terms.

However, many mortgage people will smile when they tell you they can get you financed for your own loan, perhaps without telling you about just how bad and dangerous their recommended home loan may be for your family.

Before you jump on board with an Interest-Only, Adjustable-Rate Mortgage (ARM), or any other "exotic" loan, understand exactly in to what type of scenario you are getting your family.

"Exotic" mortgages do not have to be dangerous if you understand them and they match your financial predictions.

In most cases, the loans to people with damaged credit come with a pre-payment penalty clause, meaning you will have to keep the high interest rate and fees for at least TWO years or face a stiff penalty for financing out of it.

Are you curious about the result of a pre-payment penalty on a home you purchased for $250,000 with an 80% mortgage ($200,000) and a 20% down payment ($50,000)?

With a $200,000 interest-only mortgage, you are paying $1583.00 per month. If you choose to refinance out of the high interest-rate mortgage and incur the pre-payment penalty, you will have to show up to the re-fi closing with an additional $9,500 payable to the lender of your high interest-rate mortgage for the "privilege" of financing out of the high interest-rate mortgage.

This is the harsh reality of high interest-rate mortgages. People with damaged credit should think long and hard about moving forward with "traditional" home financing, as "traditional" home financing when you have damaged credit is the penalty that keeps on taking from you each and every month.

Reality Check If You Are Pursuing Your Own Financing Right Now.

Getting your own financing right now with a weak credit score and/or a weak credit/application file could haunt you for years. How bad could it be, you ask? Take a look at the following comparison between a 30-year fixed rate mortgage at 6.5% and a 30-year fixed rate mortgage at 9.5% (not APR):

Purchase Price Down Payment Interest Rate* Total Interest Paid Total Amount Paid

$250,000 $25,000 9.5% $456,091.91 $681,091.91
$250,000 $25,000 6.5% $286.975.10 $511,975.10

Even if your damaged credit is not so bad that a lender will approve you for a loan at 9.5%, you will pay a huge penalty for the damaged credit.

How Much of a Penalty?

Because of your damaged credit, you will pay a whopping $169,116.81 more on a 30-year fixed rate mortgage than a person with good credit and the same loan.

Just because you can get a loan right now for your new home does not necessarily mean that you should get a loan for your new home, especially if a BETTER option exists.

This example also does not account for the Annual Percentage Rate, which factors in all the closing fees. Obviously, the APR will increase the Interest Rate stated above and increase the Total Amount Paid as lenders will impose "junk" fees because of your damaged credit.

People not aware of the benefits of a legitimate rent-to-own home ownership program unfortunately pursue home ownership the traditional way, allowing mortgage "specialists" to get them approved for terrible loans with long-term pain and suffering.

The old saying "Buyer Beware" means you must be aware of your options when pursuing home ownership.

Along with the outrageous interest rate, huge down payment, and eye-popping closing fees, some mortgage "specialists" forget to tell you about the pre-payment penalty imposed by the lender, which prevents you from refinancing into a better loan for at least two years, despite your improved credit.

Read the small print and question your mortgage specialist before signing the loan papers.

Once you understand thoroughly your options, take the next step toward The American Dream -- a dream you hopefully will never regret while armed with the right information.

Benefits of Renting to Own Your New Home

*You choose your new home in the neighborhood you have chosen.

*You enjoy your new home as if it is your home, i.e. your colors, your backyard, and your improvements.

*You enjoy a reasonable monthly payment and a very reasonable down payment on your new home.

*You get the time you need by renting while repairing your damaged credit.

*You work with one of our mortgage specialists during the lease term to match you with the most appropriate loan program.

*You lock in the future purchase price of your new home, a price often below market value.

*You get the title seasoned, thereby qualifying you for a refinance when getting your home financed.

Go to http://www.aSOLUTION4you.com to take the first and most important step toward receiving the keys to your new home offered with rent-to-own terms. You will not have to put off moving in to your dream home or place your family's financial future in jeopardy by taking a home loan while suffering from damaged credit.

You really can receive the keys to your new home and get the time you need to rebuild your credit without being hammered for your damaged credit.

Florida Rent to Own Home -- Home Financing Secrets Revealed
People with damaged credit or a less-than-desirable credit file mistakenly believe that getting their own home loan right now is better than renting to own their new home while cleaning up their damaged credit. Before getting a home loan, discover how Jim & Diane Mercer will save a whopping $169,116