Many people are turning to Lease Purchase or Rent to Own deals because they want to own a home but can’t qualify in today’s market. While this can be a wise course of action, it is important to plan for success from the start of your lease term!

In today’s economy, you may be like many people who are unable to qualify for a mortgage. Still, owning a home is important to you and you don’t want to settle for renting.

You may be considering a Rent to Own, Lease Purchase, Lease Option and Owner Financing transaction as an immediate option to help you achieve your goals.

While this can be a great option for those who are serious about buying a home, a Lease Purchase transaction is a financial nightmare if you don’t do what it takes to qualify for a home loan by the end of your option term.

A good credit score is essential to your loan approval. Unlike a few years back, in today’s economy, good income and a down payment won’t overcome bad credit!

It is important to begin working to improve your credit score as soon as you decide to Rent to Own a home. The first step is to pay off any current collections and pay down your credit cards.

Ideally, you want to have at least four credit cards that aren’t maxed out. The reason for this is that a component of your credit score is the percentage of revolving credit that you have accessible. This means that your score will be higher if you owe $500 and have $10,000 available than if you owe $500 and only have $2000 available.

If you have finance company loans you will want to get them paid off as soon as possible and have the accounts closed. While bank loans reflect positively on your credit score, finance company loans will actually lower your score. The reason for this is because most people seek out finance company loans when they are strapped for cash. The credit bureaus see these loans as a sign of financial troubles.

While focusing on your credit is the first step, that isn’t all you need to do. What other factors will come into play when it comes time to apply for a home loan?

Income is, of course, very important. Ideally, you want two years with the same employer, or at the very least in the same field. Job changes are fine if you are advancing in the same line of work, but should otherwise be avoided.

Self-employed individuals have special concerns. More and more self-employed individuals are having a difficult time qualifying for a loan in today’s lending environment, regardless of their credit score. The reason for this is that they have difficulty verifying their income through their tax returns.

Historically, a large number of self-employed individuals sought out stated income mortgages. As these loans are no longer available, many are electing to do Lease Option transactions for two years to give them the time to document their income. It is important to do what it takes from the beginning of the lease term so that the required documentation will be in order when the time comes. Most every lender will require at least two years of documented income.

Beyond credit and income, there are other factors that can play into a loan approval. While once those who were not US citizens could qualify for a mortgage without much trouble, this has become significantly more difficult. Non-citizens should be prepared to have established credit files and significant cash down. Even then, approval is not guaranteed.

By actively working on credit restoration and paying attention to other factors that will impact your chances of mortgage approval, you can quickly be on your way to becoming a Lease Purchase success story!

 For more information on Finance the Dream, America's premier Lease Option company, please visit us at http://www.financethedream.com .