A lease option is a great way to get a home if you are not presently able to get a traditional mortgage. You need to make sure you are protected and having an agent that knows, and understands lease options, is the first step to protecting yourself.

One of the biggest downfalls to a lease option is that you are paying more than present market price for the home, and also higher than market rates for rent and down payment. This is OK, if at the end of the option period you exercise the option to get the home, because you can re-coop your down payment and the amount that you are paying extra in rent. But, if you don't you can lose thousands! The key is to find an agent that will help you fix your credit over the period of the lease to make sure you actually can get the house.

If you talk to an agent about a lease option and they don't get you in contact with a mortgage broker, then more than likely, they are not interested in fixing your credit. If they don't you will lose thousands in the transaction and still not be able to get your dream home. You see, if they get you in contact with a mortgage broker, that broker will sit down with you and your agent and tell you exactly what needs to be done and the timelines expected to get those steps done, in order for you to be able to purchase the home at the end of the option.

A lot of homes on the market that offer lease options are being billed as a lease option and are actually set up as a bait and switch. You see an agent may put on a home that is a lease option or owner financing just to increase the calls to impress a seller, but in reality have no idea how to do one and if they don't it could cost the buyer thousands or just be a complete waste of your time. What the agent really wants to do is try to get his calls to increase and hopefully to be able to try to get them into a traditional loan. You can quickly weed out an agent that is doing this and doesn't understand how lease options work, by the amount down they are requiring. If they offer you a lease option and they want 10% down, then this agent has no clue what they are doing! If you have 10% down and can't get traditional financing then you should try to get owner financing. You get the home at today's price and interest rates only slightly higher than what the banks are offering.

Fraud is another major concern to watch out for when doing a lease option. You see there are many types of fraud that can happen within a lease option that can make you lose everything you have worked so hard for. Working with an agent that understands lease options, and how to protect the buyer as well, as the seller, can save you and your money. For more information on the types of fraud and what your agent should be doing for you, please read my article "Don't do a lease option without representation".

I, personally, love helping people get in to their dream homes and helping them with their credit in order to do that. You see, I got my first home on a lease option, because I had my own business and didn't want to pay the stated income loan interest rates. After two years, I refinanced and got a great rate and a home. But, there were mistakes made along the way because I bought the home without representation. I've learned from those mistakes and now have taken my knowledge and want to help others realize their dream of home ownership.

For more information on buying a home with a lease option, please feel free to contact me anytime.

Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739
Todd@IFoundYourNewHome.com
http://www.ifoundyournewhome.com/