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How I bought my first $100,000 home with a rent-to-own program despite a bad credit

HOMEOWNERSHIP is a dream of millions of Americans but it seems out of reach if you are living on paycheck.

A North Carolina woman’s dream came true after some financial guidance through the home ownership program.

Heather Torres becomes homeowner for the first time after raising low credit score

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Heather Torres becomes homeowner for the first time after raising low credit score

Heather Torres, 35, has rented in Greensboro for many years.

She wants to buy a place but the price is low credit scorecombined with paying high rent, didn’t allow her to save enough for one deposits.

Determined, a single mother of two, aged 4 and 13, Heather tried to house-hunt but came across real estate agents who didn’t help her understand what it took to become a homeowner. .

That’s when she connected with Landis.

Heather, now a first-time homeowner, told The Sun: “I got to know Landis from the real estate agent I worked with.

“She suggested that I contact Landis after I was unable to get pre-approval on my own due to a high debt-to-income ratio.”

It was a decision that changed her life – Heather was on a new path to becoming a homeowner.

How the rent-to-own scheme works

Heather started working with financial professionals at Landis with the goal of becoming a homeowner.

She was able to get the financial guidance she needed, but the process didn’t happen overnight.

Heather, who works in the legal field, must see if she qualifies for their program by filling out an online application.

After she was accepted into the program, financial experts worked with Heather to budget for how much she could afford.

Next, it’s time for house hunting.

With the budget provided by Landis, Heather can go out and choose the house she wants to buy.

Landis walked in, placed an offer and bought Heather’s house.

While Landis declined to share how much Heather’s property costs, the homes Landis’ clients buy range in price from $110,000 to $400,000.

Landis takes care of all the due diligence, checks and paperwork.

How much money do you spend?

Landis now owns the house Heather wants to buy.

During this time, Heather leased it with an agreement to eventually buy the house back from Landis.

Landis calculates a client’s market rent based on the home’s value.

To give you an idea of ​​how much you’ll pay, Landis offers “Home Computer” will run the numbers on how much you’ll pay rent, followed by your mortgage payment when you complete the program.

The home calculator allows you to choose the area you want to live in, as long as Landis invests in that area.

Next, you can determine the cost of the house, how much you will deposit, followed by how long you want to rent.

For example, if you choose to buy a $300,000 home in Indianapolis, Indiana, you’ll receive a suggested upfront payment.

In this case, $9,000 was suggested.

The company allows people to rent for up to 24 months.

Here is a breakdown of payouts based on Indianapolis properties:

Landis Program (24 months)

  • Rent: $2,125
  • Upfront Savings: $301
  • Total per month: $2,426

Mortgage costs after the program:

  • As low as $1,750
  • Save up to $375 per month with Landis

During the rental period, Landis financial experts will work with the participants to improve their credit and save more money.

Tom Petit, co-founder and co-CEO at Landis told The Sun: “The core of Landis isn’t really the rental program but a key component of it.

“The core is the coaching we give people. It’s financial coaching, financial empowerment.”

Stanford graduate, Cyril Berdugo and Tom Petit, co-founders of Landis

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Stanford graduate, Cyril Berdugo and Tom Petit, co-founders of Landis

Landis sets aside part of a customer’s monthly payment into a prepaid savings account.

That money will be used for prepayment and closing costs.

If a customer decides to exit the homeownership program after Landis buys their home, Landis will refund the customer the accumulated ownership savings minus the 3% exit fee.

This fee is to cover the cost of listing and selling the home.

How Heather took ownership of the house

Landis and Heather agreed on a purchase price and a date when she could own it.

They built a financial plan that allows Heather to pay her credit card twice a month, which boosts her credit score faster.

Landis handled all the paperwork for this process, working closely with Heather to ensure that she budgeted correctly and met all required application deadlines.

Heather was able to submit a cash offer for her home.

This past August 2021, Heather owned the house she was renting.

“I feel incredibly fulfilled being a first time homeowner, especially being a single mom and being able to have a place for my kids to call home,” says Heather.

Are you eligible?

Landis is active in approximately 15 states in the South, Southeast, and Midwest. It only works on its own program.

The application is free and available online or through their free app.

Landis explains that they will approve credit scores as low as 550 with a gross monthly income of $2,500.

“Based on the app, we’ll assess whether we’re in the right place to help them right away, and for most people, the answer is yes,” explains Petit.

Accepted participants will receive a budget to find the home they want to buy.

They will also receive a financial plan that outlines the steps that need to be taken to achieve home ownership.

A financial coach will monitor progress and troubleshoot any questions or concerns.

Most customers who come to Landis have low credit scores.

“People over the age of 550 have often been through difficult circumstances and what is needed is a little reset.”

Landis says they have made home ownership dreams come true for thousands of families.

Its success has attracted the attention of celebrities, such as actor Will Smith and rapper Jay Z.

The men invested in Landis’ latest funding round in 2021.

It has raised more than $182 million since it was founded in 2018.

As for Heather, she is living happily in her Greensboro house.

Along the way, she needs to do some electrical work. Turns out sparks flew between her and Alex, the electrician she hired. Now the two are married.

What are the risks?

As with any major financial purchase or investment, it’s best to be well-informed so you don’t take risks.

For Heather, there is transparency in her tenancy agreement. She understands what she will have to pay and for how long.

That may not be the case for everyone.

If you are paying rent for the entire lease term, the question is whether a portion of each payment will be applied to the final purchase price.

Treat the home buying process the same way you would if you were buying a home outright.

This means you need to do your due diligence, research the area, compare prices with other homes nearby, research the contract, and research the seller’s history.

We interpret the states Mortgage loans and bill assistance worth up to $80,000.

Plus, how to get mortgage reduction through a federally-backed refinancing program.

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https://www.the-sun.com/money/4695599/first-home-rent-to-own-bad-credit-score/ How I bought my first $100,000 home with a rent-to-own program despite a bad credit

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