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What is the difference between an Rent w/ an Option to Buy & Rent to Own?

We are going Sunday to talk to a couple to talk about what our difference options would be with their home they have. They originally had it on the market to sale. But, we started talking and they said they are willing to work something out with us. My husband & I are really comfortable with the rent to own and having to put so much money towards a down payment at the end of the contract if we may not get be able to get a mortgage. Then all the money we put in would be forfeited. We wanted to know if there was a difference if we decide to do a Rent with Option to Buy. We really like the home and I am sure we will be interested in buying it. We would love to buy it now, however we can get a mortgage right now, due to our debt to income ratio. However, we are both starting new jobs with better pay and we know in approx. 2 yrs we will have enough, saved for a down payment as well as we should have no problem getting a mortgage. Can someone or anyone explain to me the differences as well as the pros and cons of both options. Thank you in-advance.

Public Comments

1. if u rent with the option it means u could choose to buy it if you felt like you wanted to but if u rent to own it means you will pay rent until u eventually get the money to purchase this household
2. What me and my husband are doing is leasing to own the home we are in now. We put 2,000 down which is going toward the down payment when we get a mortgage in a couple of months and the owner also gives us a 100 dollar credit toward the down payment every month we pay the payment on time which is great because when we get our mortgage we will already have what we need for the down payment from the down payment and credit every month and do not have to come up with more! We had the debt to income ratio problem until we found a company that does debt reduction we are just waiting on one more thing and we are ready to buy! If they will go for something like that I sure it will help you out like it did us!
3. They are both referring to essentially same thing. Both are poor options for buyers because you pay so a high price. You have no leverage because you have no cash to offer seller. You are better off waiting until you can obtain a mortgage and make offer then. Then you have real money and real leverage. You cannot risk putting money down if you are uncertain about obtain financing down the road. an option to buy would be an actual contract you would enter into have the right to purchase the property at a pre determined price. These options are not free. Most sellers will sell you an option. They will not just give you an option.
4. if you can avoid it don't do it, it all is in favor of the owner to long to list, some will say if you use an attorney it is afe well i can tell you that it is not safe
5. Get an attorney to represent you, to go over the documents with you BEFORE you sign anything. This can be a good thing for both buyer and seller, but it is a BIG purchase and there are pitfalls along the way--avoid them by getting an attorney. Can be two different names for same thing. Differences are in the contracts you sign, so read them carefully.