How to Make an Offer on a Home That You Rent
Purchasing a home is an important step for many people. The decision to buy a home shows a desire to settle down. If you are renting a home that you love, you may be interested in purchasing that property from your landlord. Enlisting the help of experts and understanding the value of the property will help you in the process of making you the proud owner of the home you currently rent.
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Instructions
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Estimate how much the home you are renting is worth. You can acquire online estimates on websites such as zillow.com.
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Get copies of your credit reports from the three major credit agencies. The Federal Trade Commission allows U.S. citizens and residents to get their credit reports free once a year. Check your credit report for inaccuracies, and rectify any errors
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Save for the down payment of the house. It customary to have 20 percent of the cost of the house available for the down payment, according to CNN.
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Enlist the expertise of a lender or mortgage broker. Explain to the potential broker that you want to buy the house you are currently renting. Ask about the loan options available to you if you have not saved the 20 percent down payment.
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Decide if you want a fixed rate mortgage or an adjustable rate mortgage (ARM). Fixed rates mortgages are mortgages with monthly payments that remain the same over the life of the loan, according to Nationwide. Adjustable rate mortgages are mortgages with monthly payments that can increase and decrease depending on the fluctuations of the interest rates in the market.
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Contemplate the length of time you want to commit to your fixed rate mortgage loan. The life of a fixed rate mortgage loan can be 10, 15, 20 or 30 years.
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Contact a property lawyer, and ask for a consultation. Inquire about what items and issues you need to address in a contract in which a renter wants to buy his current residence from his landlord.
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Make an official offer, in writing, to your landlord. Include the amount of your offer. Present this offer to your landlord with a letter from your potential lender.
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Write a contract for your offer on the home you are renting. Request that your landlord inspect the home for structural soundness in case of natural disaster. Ask that the home be officially valued. Set a time limit for your landlord to respond to the offer.
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Sign the papers needed to pass ownership of your home from your landlord to yourself. Hire a lawyer to review all legal documents before you sign.
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Tips & Warnings
Check with several lenders or mortgage brokers before choosing which one you will work with.
With your landlord, decide if any of the rent you have paid can be used toward the price of the house.
