Financing Programs

Our special Lease/Purchase and Owner Financing programs mostly cater to people who can't immediately qualify for a traditional mortgage loan. Please review several sections below to understand how our financing programs can help you to get into a home of your own.

What are the reasons you may not be able to qualify
for financing through a mortgage company?

There are many. Banks are pretty rigid in their guidelines. One of any of the reasons below could be enough.

Depending on the amount of cash you have for a down payment, we offer a few different alternatives you can review below.

Got 10%-30% Cash To Put Down ?

With a large down payment we can approve you for our No Bank Qualifying Owner Financing program, which allows you to take full advantage of homeownership benefits, such as mortgage interest and property tax deductions (on your tax returns), monthly mortgage loan balance paydown.

Basics Of Owner Financing

What does the term No Bank Qualifying financing mean?

It means that in order to buy a home today, you don’t have to go through a rigid loan qualification process required by banks and mortgage companies.

Who is No Bank Qualifying Financing Program For?

This program is for Buyers who want to own a home now, but can not qualify for conventional financing through a mortgage company or a bank.

How Quickly can I get approved for and move into the house ?

Typically within 1-2 business days.

How much overall paperwork is involved in the purchase?

Not much at all. The whole procedure takes about 15-30 minutes. Compare this with a traditional FHA or VA closing where you are signing a 2 inch high pile of documents for 1.5 hours.

How Does Owner Financing Work?

On all homes we have for sale we offer Owner Financing, which usually requires no or very little qualifying. In this case we are the bank, and you are making payments directly to us.

There are different financing agreements we can use, depending on the situation: Contract For Deed, Note and deed of Trust, Land Contract, etc. They all spell out the length of the loan, the interest rate, the amortization term, the monthly payments, etc.

What is the difference between No Bank Qualifying Financing and Lease/Purchase plan?

With Lease/Purchase you are still a Tenant who has the Option, or right to Buy a house within a specific period of time, typically during your Lease term. You have the benefits of possession and a guaranteed pre-agreed upon price of the home you will eventually own. But you don’t have financial benefits, such as mortgage loan interest deduction , property tax deduction, mortgage balance paydown, etc.

With Non-Qualifying financing you actually own a house and are entitled to all financial benefits of ownership, which may easily amount to $3,000-$6,000 per year in cash back from IRS.

Is Non-Qualifying Owner Financing the same as Non-Qualifying Assumable?

No, it's not the same. We only specialize in Non-Qualifying Owner Financing.

How Long Is The Owner Financing For?

While traditional mortgage lenders are in the business of providing permanent long term home loans to buyers, we are in the business of buying and selling homes. Therefore, we only provide a short-term financing to facilitate the sale.

Typically we finance for 1-2 years. At the end of that term you will have to obtain a replacement loan from a traditional lender and pay us the remainder of the financed amount.

What Closing Costs, Fees and Points Shall I Expect To Pay?

You will need to pay for the 1-st year insurance premium to have the home insured against damages. Depending on the type of the financing agreement we use - in most cases the closing fee will be within $1,000 or 1% of the sale price which is higher. These are fees charged by the attorneys to prepare the legal forms and closing agency/title company to prepare the settlement statement. Depending on the sate law there may be a cost associated with getting tax certificates for the property and survey.

How Do I Apply?

Just follow our 7 Steps To Home Ownership plan. Click Here to get going.

Got 5%-10% Cash Downpayment ?

Our Lease/Purchase program is perfect for you. If you have good steady income and monthly debt payments that are not overwhelming we can get you approved immediately.

Lease/Purchase Basics

Who is Lease/Purchase Program For ?

It is designed primarily for 3 groups of Buyers.

Group 1.

Buyers who have minor credit problems which still need to be corrected. To get a loan you will need to upgrade your credit to “A”, which typically means, old collections accounts must be settled or paid off, and you should have no late payments on your current credit accounts for the last 12 months preceding the closing of the purchase.

Group 2.

Buyers who don’t have enough cash to cover the downpayment and closing costs. Typically, mortgage companies require that you have about 5.5%-6% of the purchase price in your hand and they’ll finance the rest. In many cases they also allow you to receive a gift from a relative or even a friend for part or all of the cash needed.

Group 3.

Buyers who have been self employed for less than 2 years. The lender will require that you have at least 2 years of self-employed tax returns before they consider making you a loan. If you have been self-employed for more than 2 years, but you are writing off a lot of expenses and showing very little income from the business, you’ll need to change that pattern before you’ll get the loan.

Benefits Of Lease/Purchase

If you belong to one of these 3 Groups our program offers you 3 important benefits:

1. You buy yourself some time.

During that time you must work on whatever is stopping you from getting a loan today, your weak link. You must correct your credit, build up the downpayment, or work up a consistent income from self-employment.

2. You lock up the price of the home upfront.

During the term of the agreement the price of the home will not change. Yet the prices of homes in the Austin area lately have been growing at a rapid rate. If you just continue leasing where you are right now, you will likely discover that a year or two from today you will have to pay 10%-15% higher price for the same house you wanted to buy now. Why do that, when you have Lease/Purchase alternative?

3. You will already be living in the home of your dreams.

That’s why you decided to buy in the first place, right? You got tired of apartment living and making your Landlord rich.

Common Questions And Answers About Lease/Purchase

Will The Rent Money Apply To Purchase?

Unfortunately, no. The rent is just rent, it does not count towards your purchase.

Who Will Be Responsible For Taxes & Insurance?

Until your loan is approved and purchase is closed, we are responsible for paying property taxes and having the house insured. After closing you will become responsible for paying taxes and getting your own insurance.

Is There A Warranty On Systems And Appliances In The House?

We do offer our own 30 days home warranty policy. After you take possession you have 30 days to use the house, run the systems in the home, check appliances, air conditioning, heating, plumbing, etc. to make sure everything works good. If you discover something is not working properly, we’ll send our contractors to repair it.

There are also commercial companies selling homeowner warranty insurance known as Homeowner Warranty Shield” that has a coverage of up to 1 year, and may be renewed. A lot of new homeowners buy a policy like that. It costs about $300 per year.

Who Will Be Responsible For Maintenance And Repairs?

While you are on a Lease/Purchase plan you are responsible for ALL repairs and maintenance. Therefore, we request and encourage you to have a professional home inspector to look through the house before you commit to this plan, so you know exactly what you are buying. All new buyers do that, why shouldn’t you ?

Can I Buy Early, Before The End Of The Lease?

Yes, if you have your loan lined up, and enough downpayment money, there’s no reason to wait until the end of your agreement.

What Happens If I Don’t Buy At The End Of The Lease?

You must buy the house by the end of your agreement. If you don’t, your agreement terminates and you loose you original downpayment and any additional money you have contributed towards the purchase.

I Still Want To Buy, But Can’t Get A Loan?

If, during the term of the agreement, you were late on your payments, or other credit accounts, if you incurred additional debt, or jeopardized your loan in some other way, obviously, you were not making a serious effort to get ready for the purchase. Therefore, we won’t give you a second chance.

If, however, you were on time and did everything you could, but still could not get financing, we will give you another opportunity. The price and terms may change, though, but we won’t ask you to move.

Can You Convert Me To Your Non-Qualifying Financing?

Possibly, if you can raise more cash for down payment, or if your budget allows you to make high additional payments towards equity. We do it on a case by case basis, depending on your Lease payments record.

How Long Does It Take To Qualify And Move In?

Once we have your application we typically can give you the answer in 1 business day. If you are quick, you could be moving into a house within a couple of days.

What Do I Need To Qualify?

For this program we normally require 5% of upfront“commitment” money - it will be applied towards your downpayment or closing costs at the time of purchase. If you don’t have that much, check out our Downpayment Installment Plan below.

How Do I Apply?

Just follow our 7 Steps To Home Ownership plan. Click Here to get going.

Got Less Than 5% Cash Downpayment ?

Have not saved full 5% for a downpayment so far? If you have high income and some discipline, you may still take advantage of our Lease/Purchase program (see below). You can qualify to build up that equity while you rent. To learn more about this opportunity please read about our Downpayment Installment program below.

If you have less than 5% cash for a down payment, this plan may allow you to still get into an home on a Lease/Purchase program.

Depending on your monthly income and debts we will work with you so that you can build your down payment over the term of the Lease. These will be separate monthly payments in addition to the base rental payments. The goal is to build 5.5%-6% of your purchase price while you are on the plan.

You will have to show an adequate income that will allow you to comfortably make combined monthly payments according to the terms of this program.

Example

Suppose you would like to buy a house on a Lease/Purchase plan listed at $120,000 with 1200 a month base rent.

But instead of required $6,000 cash down payment (5%) you only have $4,000. Could you still get the home?

Yes, with this plan you could, provided you can afford to make additional payments towards equity. You are short by $2,000 from our targeted 5% equity for your down payment.

Depending on your monthly income and debts we may be able to finance this $2,0000 difference for you.

In this example, your additional payments towards required downpayment will be $177.70 and your total monthly payments will be $1,377.70 ($1,200 + $177.70).

By the end of the year you will have built a full $6,000 down payment.

Figuring Out Your Monthly Payments

It's always a good idea to determine how much you can afford and what kind of home price it would translate into.

Why Estimate Monthly Payments?

Knowing the price of the house may not immediately tell you if you can afford it and if you should look at it. Knowing (a) what you can afford on a monthly basis and (b) what payments will come along with the house of a certain price will allow you to quickly determine which homes are for you and which are too pricey.

Figuring Payments Based on Price

The good news, it's really simple to roughly estimate monthly payments on a particular home. Take 1% of the price of the home - that's what your payment will be approximately.

Example.

Let's say you are looking at a home listed at $115,000. You can quickly figure out that your monthly payment will be about 1% of the price, or $1,150.

If you can only handle $900/month you now instantly know that $115,000 is too parity for you.

Figuring Price Based on Payments

Suppose you know you can only afford a certain amount to spend monthly on house payments. What home prices should you look at? Again, it's easy. Just multiply the desired monthly payment by 100 and you'll get a ballpark of the price you'll have to pay.

Example. You don't want your payments to be higher than $1,400. Multiplying $1,400 x 100 gives us a price of $140,000. You should be looking at homes of $140,000 or cheaper.

Exceptions

There are 2 exceptions that will change the 1% relationship between the price of the home and what you can expect your monthly payment to be.

1. If you are buying with an Owner Financing plan and putting a large (20%+) down payment, your payments will go down because a smaller amount will have to be financed.

2. You have less than 5% cash to put down (which is our required minimum). In that case, depending your income, we may still be able to finance your down payment through our Downpayment Installment plan. Your can read about it when you get back to the "Financing Programs" page.

That will cause an additional monthly amount to be added to your regular payment.

How Do I Apply?

Just follow our 7 Steps To Home Ownership plan. Click Here to get going.

Got Perfect Credit ?

With that you can qualify for a variety of traditional mortgage loans, such as FHA, VA (must be a veteran), conventional, or others. If you haven't yet got your loan approval process going - give us a call. We'll help you find mortgage companies and other resources necessary to buy a home.

To learn about your next action please review:

Get Pre-Approved