hello,
what is the latest (specifically in Texas if anyone knows) if a lease purchase (not lease with option) would be treated as a refinance after 1 year of timely payments, good credit, income etc.
thanks!
Well, I’m not sure how you are distinguishing the two (lease option or lease purchase). But in Texas, both types of transactions are executory contracts that are strictly regulated by statute (Tex. Prop. Code 5.061 et seq.). You may be thinking of a contract for deed, another type of executory contract that requires the buyer to make all the payments under a contract and then gets a deed at the end. That type of contract is also covered by 5.061.
In any of these types of transactions, there is no immediate transfer of title and the deed is to be delivered at a later date under certain conditions. So if you were buying a house in this way and made payments for a year, the lender would not consider it a refinance because you had never taken title to the house.
If you were buying on owner financing, however (subject to, wrap, etc.), and you got the deed right at the start, then after a year it would be considered a refinance because you own the property.
Does that answer your question?