October 17th, 2014
The Demand Institute, a research firm, released a study about millennials and home buying. It found:
One of the most interesting findings is that 69% of millennials would consider a lease-to-own financing option. That means a portion of the rental payments would go towards the down payment of the home.
In a lease-to-own scenario, lenders determine the acceptable funds for the down payment by calculating the difference between the market rent (determined by the appraiser on the appraisal) and the actual rent paid over the last 12 months.
The documentation people need, based on the Fannie Mae website:
Please note some loan programs may not accept lease-to-own options. You need to discuss the options with a licensed mortgage loan officer.
Still, the lease-to-own strategy might become more popular with millennials. It is important to let them know what's available and the criteria they need to fulfill.
I love talking with young people about financing options when they purchase a home. If you work with millennials who have mortgage-related questions, they can always call me at 757-490-4726 or email firstname.lastname@example.org.