Are credit issues keeping you from shopping for a home?
Have a recent foreclosure? Short sale? Bankruptcy?
Since the recession hit our country beginning in 2008, many people have developed credit issues. Home values plummeted and the jobs vanished. Without income, many hard working and good people found themselves in growing debt and underwater on their homes. This lead to defaults, judgement, foreclosures, short sales, and yes, even bankruptcy. The credit market reacted quickly by tightening up credit requirements and the credit simply dried up.
The Bad Days are Over – Opportunities Await
The dark days of the recession are over and while some areas of our economy are still recovering, many areas are thriving. The stock market is closing at record highs on a regular basis, we are seeing gains in the jobs market, home builders are back and banks are lending to those with good credit. The challenge though for a lot of potential home buyers is that their credit and savings accounts have not rebounded like the stock market. For those people, the dream of home ownership seems just as far away as it did during the height of the recession. Well, that is until now. OneBlue Real Estate has partnered with a company that is helping provide a pathway to home ownership for thousands of Floridians.
A Pathway to Homeownership
We are dedicated to helping responsible families or individuals with a fair and transparent pathway to homeownership. The credit crisis has created thousands and thousands of households in Florida that cannot obtain a mortgage, despite the fact they have a stable source of income and the ability to pay. These potential home buyers are forced to rent and unfortunately cannot purchase a home even at current depressed housing prices. Unlike other programs, the program that we can help you get into, enables approved Floridians to find a home that they want to rent, but also would like to eventually buy through our partner’s Pathway to Homeownership “Lease with a Right to Purchase Program.” Unlike a traditional mortgage, your financial commitment is limited to the initial term of the Lease you are not obligated to renew the Lease or purchase the home. It’s YOUR choice.
How the Pathway to Homeownership Works
The pathway to homeownership is truly simple and OneBlue Real Estate is here to guide you and help you along every step of the way.
First, we will guide you through applying for the program. The application is online and easy to complete. Once you are pre-qualified you will be required, along with all persons 18-years of age or older that will be living in the home, to submit a full application where the company will perform their credit research and criminal background check. If you are approved, the program will let you know the maximum monthly rent and the total cost basis of the home for which you qualify for.
Once you are approved, the fun really begins! You will work with one of our elite real estate professionals in the OneBlue Real Estate office in Orlando. Broker and Owner Kevin Johnson will meet with you to review your approval, home must have and wish lists. We will take you to view homes and help you in the selection of a home that is within the approvals budget and meets the program’s criteria. Once the home is identified, the company will attempt to purchase the home. There are many factors that determine if the company will be able to complete the purchase which varies from home to home. Kevin can go over that with you when the time is right.
The final stage involves the home’s seller and the company agreeing on the purchase price for the home. At that time, you would be required to sign a one year lease for the home along with a Purchase Right Agreement. You will pay your first month’s rent along with security deposit which will be held in escrow until the closing.
What about this “right to purchase?”
Once the home is purchased and you are renting from the company, you will have the right to purchase the home at anytime during the next five years. While your lease is renewed each year, you are guaranteed the right to renew it for five years. Each year during the lease, your rent will increase by no more that 3.75%. For example, if the Monthly Rent for Year 1 is $2,000 per month, the increase for the next year is $75/month (ie, $2,000 x 1.0375).
Of course, the whole point to this program is you having the right to purchase the home any time during the five year lease. Each year, the Purchase Right Price increases by 5% (ie, Prior Year Purchase Right Price x 1.05). In the example, if the Total Cost Basis of the home is $200,000, then the Purchase Right Price for Years 1-5 is as follows:
- Year 1 ………………………………. $210,000
- Year 2 ………………………………. $220,500
- Year 3 ………………………………. $231,525
- Year 4 ………………………………. $243,100
- Year 5 ………………………………. $255,255
There are additional costs that you will incur if they exercise the Purchase Right such as closing costs to purchase the home, including transfer taxes, attorneys’ fees, title insurance, etc. Therefore, actual total costs to exercise the Purchase Right will vary.
A Couple Important Key Considerations
Among the key considerations that you should consider include:
- the value of the home may not increase above the Purchase Right Price
- you may not be able to exercise the Purchase Right because you may not qualify for a mortgage
The company your are buying the home from is not a mortgage company, does not have any obligation to provide and does not provide financing and cannot guarantee or in any way assure that a resident will be able to obtain a mortgage if and when he/she wishes to exercise the Purchase Right.
If necessary and desired by you, the company will assist you in entering a credit repair program to increase the likelihood of qualifying for a mortgage in the future. The company cannot guarantee or in any way assure that such program will increase the likelihood that you will qualify for a mortgage or will obtain a mortgage in the future.
Want to know more?
Silly question, right? Of course you do! OneBlue Real Estate’s Broker/Owner Kevin Johnson is standing buy to help YOU realize the dream of homeownership. To speak with him, simply call 321-250-5222 or click on the link below to see if you qualify!