he recession of 2007 was a wake-up call to not only American lenders, the government and the financial system, but for thousands of homeowners as well. It was unfortunate for borrowers, many of which lost their homes. However the past is the past, and it’s time for their lives to move forward. Although their dreams of these families have been bruised, there is chance for restorations, and many options that they can take to make homeownership a reality again.
1) Contract for deed or land contract: The boomerang buyer would pay the owner a regular payment, slowly paying off the contract. The landowner holds the title to the house until it is paid in full. However, the buyer would hold an equitable title, which gives them most every right of ownership of the house. This may be a good option for new, or boomerang homeowners because it gives them a chance to own a home without traditional financing. The boomerang buyers will also be able to deduct the interest, and property taxes on their income taxes.
2) Rent-to-own or lease option: The boomerang buyer would pay rent for a house, and have the option to buy it for a set period of time, for a set amount. The contract may be written to include a reduction in purchase price by a set amount per month that the place was rented before the purchase. This is a good option, as it gives buyers time to reconstruct their credit during the period of the option. Oftentimes, if real estate prices are increasing, this is a great option simply because it freezes the price of a home. However, since it’s just an option, if real estate prices have tanked, they can say no and walk away. One possible drawback is because of the lease-option, some investors will charge a premium rent because the ability of the renters to purchase the home. 3) Private Carry: The boomerang buyer would buy the house from the owner and the seller would carry back part of the purchase price with a note and deed of trust or mortgage, This is a great option for those who want to jump right back into the market very quickly. Often times private parties may be more understanding and flexible, not doing as an extensive of credit checks; however it may result in a higher interest rate. Regardless, this is a solid option, but may not be readily available. However, these boomerang buyers need to be careful, as contract for the deed, rent-to-own, and private carry option, and may benefit the investor more than the buyer. …show more content…
If buyers aren’t careful, they may pay higher rent and/or a higher purchase price. Another example is found in Texas. A law was passed which stated that the owner of the property deed has to formally foreclose on the folks who are in the rent-to-own option agreement. By passing that law, the skilled investors do what is called a contract for beneficial interest or virtual option, which is a form of trust that falls under the UCC, not real estate law. In layman 's terms, it’s very similar to contract for the deed, but it lies in a trust instead. The owner turns the house from real to personal property by putting it into a trust, and then the seller doesn’t have to do a foreclosure. This leads me to my 4th option 4) The
1) Contract for deed or land contract: The boomerang buyer would pay the owner a regular payment, slowly paying off the contract. The landowner holds the title to the house until it is paid in full. However, the buyer would hold an equitable title, which gives them most every right of ownership of the house. This may be a good option for new, or boomerang homeowners because it gives them a chance to own a home without traditional financing. The boomerang buyers will also be able to deduct the interest, and property taxes on their income taxes.
2) Rent-to-own or lease option: The boomerang buyer would pay rent for a house, and have the option to buy it for a set period of time, for a set amount. The contract may be written to include a reduction in purchase price by a set amount per month that the place was rented before the purchase. This is a good option, as it gives buyers time to reconstruct their credit during the period of the option. Oftentimes, if real estate prices are increasing, this is a great option simply because it freezes the price of a home. However, since it’s just an option, if real estate prices have tanked, they can say no and walk away. One possible drawback is because of the lease-option, some investors will charge a premium rent because the ability of the renters to purchase the home. 3) Private Carry: The boomerang buyer would buy the house from the owner and the seller would carry back part of the purchase price with a note and deed of trust or mortgage, This is a great option for those who want to jump right back into the market very quickly. Often times private parties may be more understanding and flexible, not doing as an extensive of credit checks; however it may result in a higher interest rate. Regardless, this is a solid option, but may not be readily available. However, these boomerang buyers need to be careful, as contract for the deed, rent-to-own, and private carry option, and may benefit the investor more than the buyer. …show more content…
If buyers aren’t careful, they may pay higher rent and/or a higher purchase price. Another example is found in Texas. A law was passed which stated that the owner of the property deed has to formally foreclose on the folks who are in the rent-to-own option agreement. By passing that law, the skilled investors do what is called a contract for beneficial interest or virtual option, which is a form of trust that falls under the UCC, not real estate law. In layman 's terms, it’s very similar to contract for the deed, but it lies in a trust instead. The owner turns the house from real to personal property by putting it into a trust, and then the seller doesn’t have to do a foreclosure. This leads me to my 4th option 4) The