AgentMortgage

Where did all the lease-to-own deals go?

Despite huge demand, purchase obstacles are plenty

Of the 700 or so articles on my website, the article accessed most frequently over the last year has been one I wrote in 2004 on lease-to-own home purchases. This is a combination lease and purchase where the renter/buyer occupies the home as a tenant but has an option to purchase it within a specified period at a specified price. I will call these "LTO" deals. The intense interest in LTO deals today partly reflects the more restrictive and rigid mortgage qualification requirements that emerged after the financial crisis. This has created a large body of wannabe homebuyers who can't qualify for the mortgage they need to make it happen. An LTO gives them a shot. LTO buyers are hopeful that they can remedy their shortcomings as mortgage borrowers within the option period. This could mean repairing their credit, accumulating the cash required for a down payment, increasing their documentable income, or placing more distance between themselves and a prior bankruptcy ...