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is there a difference in rent to own and lease to purchase on a home?

In July our lease is up, we want to move into a home. Our credit isnt the best and we wont be approved for FHA until Sept. So we are thinking about rent to own or lease to purchase but is there a difference in the two? and is it a good idea?

Public Comments

1. No, there is no difference between those two terms, however, it could be risky. If something happens between now and when you are scheduled to purchase the property, such as property values decline or you get transferred to another job, you may be under an obligation to purchase the property anyway. An option to buy, known as a "lease-option" is a bit safer. Essentially, you are a renter, but put a deposit towards purchasing the home. At the end of your lease, you have the option to purchase the home for a pre-negotiated price. If you choose not to buy it, you can walk away.
2. Rent to own and lease to purchase are simply different terms for the same concept. Use heavy caution when entering into any 'rent to own' agreement. Insure that you read all the fine print involved, including how much of your rent is applied to purchase price, closing costs charged, conditions which might apply if you change your mind later on, and so forth. Were I you, I would attempt to extend my current lease on a month-to-month basis, even if it costs you a bit more, and wait until you are FHA approved. Then go out and purchase a house 'in the conventional method.'