If you are like many Americans, you may no longer be able to qualify for a mortgage. Perhaps your credit is less than perfect, or perhaps you have only been self employed for a short time. Whatever the reason, your inability to qualify does not mean that owning a home is not important to you.

Like many others, you may be considering a lease option or rent to own home as an alternative to buying a home.

If you are serious about buying a home, this can be a good option. However, if you dont start doing what it takes to qualify for a mortgage at the beginning if the term, a Lease Purchase can be a financial disaster.

Most everyone understands that a good credit score is the single most important factor in determining your loan approval. Unlike a few years back, in today’s economy, good income and a down payment wont overcome bad credit!

You must start repairing your credit right away! Your first step should be paying off any recent collections. You will also want to pay your credit cards down as much as possible.

Ideally, you want to have at least four credit cards that arent maxed out. The reason for this is that a component of your credit score is the percentage of revolving credit that you have available. 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 existing loans with a finance company, they should be paid off quickly. Unlike bank loans paid on time, finance company loans lower your credit score. This is because they are considered a sign that you are strapped for cash and as such had to seek out a high interest loan.

While focusing on your credit is the first step, that isnt all you need to accomplish. What other factors will come into play when it comes time to apply for a home loan?

Income and job stability are key factors. You want to try to have a minimum of two years with the same employer. The exception to this is if you have changed jobs due to career advancement. This can be viewed as a positive.

Changes in available loan products have made it especially difficult for self employed individuals to qualify for a mortgage.

While stated income loans were once popular among self employed individuals, they are no longer available. If you are considering a lease purchase or lease option, it is important that you begin documenting your income immediately. Lenders will require at least two years of documented income.

Other than income and credit history, there are other things that can impact your ability to get a mortgage. If you are not a U.S. citizen, you should be especially careful about entering into a short term lease purchase. Non-citizens will need to establish their credit files and have cash down. Even then, there is no guarantee they will be able to get a mortgage.

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