Regardless of how long you've lived in a rental home, your landlord always has the option of selling the property. As the current tenant, your landlord may give you the opportunity to buy the house. Preparing yourself for the possibility of buying can help you secure a loan with no hassles.
Step 1
Make good credit decisions. Your credit history at the time when your landlord decides to sell factors into whether you can qualify for a mortgage to buy the property. A score of 680 or higher helps you get a home loan approval. Pay every bill on time and keep your debts low. Check your credit report periodically to ensure that creditors report accurate information.
Step 2
Have cash in the bank. You will need between 5 and 20 percent for a down payment in order to buy the rental house. Save tax returns, start putting money aside each paycheck or consider borrowing from a retirement account.
Step 3
Keep copies of your tax statements. Lenders require two years of employment and copies of W-2s or tax returns to determine if you can qualify for the desired loan amount. Have this information readily available to avoid mortgage delays.
Step 4
Figure out how you will pay the closing costs. You can ask your landlord to pay the closing costs, wrap the costs into the mortgage loan or pay the costs out of pocket. Closing costs are about 5 percent of the mortgage loan.
Step 5
Meet with different lenders for a quote. Never accept the first mortgage offer you receive. Shop around and request free quotes to get the best loan and lowest mortgage rate.