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whats the difference between rent to own and lease option to purchase?

this is about homes.

Public Comments

1. they are the same some jsut word them differently! they both have a term that you rent or lease and then at the end of the term you can exercize your option to buy.
2. Typically in a rent to own situation a portion of your monthly rent goes toward the purchase of the house, you are the renter and the person is the owner/landlord. In a lease purchase situation you are usually asked to put money down upfront for the right to purchase the property within a given time frame, usually no more then about 36 months and at a given price. Also, YOU ARE THE HOMEOWNER! In the event something goes wrong in a rent to own situation, you call the landlord and they fix it, in the event something goes wrong in a lease purchase situation, you are responsible for the repairs. From a lending standpoint a lease options is a great way to get into a house right now. When you do a lease option, when it comes time to buy out the options (ie get your bank financing in place) your bank will look at this transaction as a refinance and not a purchase, so any equity is built into your loan, this can be a huge difference in rates and payments! On the other hand, the rent to own you are basically using the money agree upon by you and the landlord as down-payment money, so when you go to purchase the house this will be looked at like a purchase, so you do not get the built in equity. Good luck....
3. THIS MEANS THE SAME THING.