Lease/Option Financing - Posted by Joe

Posted by wes on December 18, 2005 at 10:16:10:

If you have had the lease/option for 12 months, there are a number of lenders that will treat the purchase as a Refinance and use the appraised value instead of the purchase price.

That would easily allow for 100% financing based on these numbers.

If you have had the option for less than 12 months, there may be lenders with a shorter seasoning requirement, but none I deal with do.

As to what the lender requires to do it this way, first find the lender that will treat a LO as a Refinance and then just ask them what their requirements are to do it that way.

Several of the main things that are usually required is that you have an actual LO contract as well as being able to show you have been making payments and doing so on time. Usually cancelled checks or money orders are a good way to document this.

Lease/Option Financing - Posted by Joe

Posted by Joe on December 17, 2005 at 17:36:00:

Does anyone know if lenders will use the appraised value of a home to allow 100% financing of a lease/option purchase? The lease/option price on the home is 229K and the value is 350K. All lenders so far have indicated they want 20% down on the purchase price. This is in Arizona. Thanks.

Re: Lease/Option Financing - Posted by Brian (WA)

Posted by Brian (WA) on December 19, 2005 at 12:11:56:

Joe,

Lenders will treat the purchase as a refi using the appraised value but will only finance the purchase price. The 229K purchase will become a 65% LTV refi with closing costs included in the refi.

Brian