Hi all;
Just wanted to get some thoughts on how to get a seller sold on a CA or SLO who wants to buy a new house. He is already pre-qualified to buy a new house, with the understanding/numbers that his current house is sold. Obviously, it is not yet, that is the one I want to work with him on. numbers look good: owes 166K, wants/worth 185-190K, payment $1400/month (PITI). I wanted to find a way to assure him that doing this would work out and perhaps with a SLO or sub 2 I could present his lender with enough documentation to ensure he is no longer paying on the loan, etc. Any other thoughts would be appreciated! Thanks!

Eric

efete, I explain to seller's that by using our program, it will normally allow them to qualify for their next house, depending on their DTI. Here's how the lender looks at it:
The lenders will usually allow 75% of the rent that the owner is bringing in. For example, if the owner's payments are $1k per month, and the owner is getting $1k from the lease, the lender will allow (normally) $750 to show towards his payments. Translated, it will increase the owner's DTI by $250 in this case. That is OK, assuming the seller isn't already close to 43% DTI.
If the owner is cash flowing from the lease option, then that's obviously better. Once you sign a CA or SLO with the seller, they can move forward, because they have a contract that the lender, in my experience, will always take to figure their DTI.

Eric, pilot is right. Most lenders will accept a signed lease agreement as proof of income for the applicant. Depending upon other factors, (credit history, debt to income ratio, employment, etc), the homeowner should not meet too much resistance from the lender.

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