RentToOwn-HouseFinder.com

I am going into the rent to own program I do not know much about renting to own a house. What is the process?

what should I look for in a program for rent to own? What are the precautions I should look out for? What are the pros, and cons of renting to own? I will be taking over payments for a preclosed house. the company is in LA, and i will only be making payments to the bank. the company does require a fee but it goes to the work they are doing to get me the house, the paperwork, the contracting, ect.

Public Comments

1. Is the person you are renting from an individual or a business? If it's a business, how many people have actually bought the house from them? Renting to own means that your rent is higher as some of the rent is supposedly going into escrow towards your down payment. Then at the end of the lease (one or two years), what are the actual terms to buy? If you *don't* buy, do you get your downpayment back? California had a rush of businesses offering rent to own, who were in reality ripping off every spare penny the tentant had (in the guise of calling it a down payment), not letting them buy (or knowing full well that they wouldn't qualify for a loan) and then getting *another* tenant for the same property with the same deal. California passed laws to cut down on this as they viewed as fraud.
2. things to know are: do the payments apply to the purchase, when is the purchase price determined, what is the purchase price, what if you change your mind, does the payments or a percentage go towards downpayment, what if the owner dies, who is responsible for maintance & taxes, just a few I can think of but there are all kinds of risks involved. Be sure and have a good lawyer read over the contract- do not skimp on this as it could have things in the contract you may not understand. I personally would not do it unless everything I mentioned above is clearly spelled out in a contract. Make sure you have every I dotted and every T crossed before you sign any kind of contract and make sure the lawyer agrees with it and has covered any kind of possible legal problem that may come up in the future.
3. It appears as if you have contacted a company that deals in pre-foreclosures. They then tie the property up from the present homeowners through a contract of some sort so the owner will move and allow them to take over the property. Sometimes they even give the owner moving fees to get started over again for any potential equity they might have in the property. They then advertise and get potential buyers to agree to a rent to own through a contract the potential buyer sign. The buyer then is required to make the monthly mortgage payments with the company that signed them up. For their payment or money they get they add a 2nd mortgage or some type of contract where they get paid when you refinance the house into your name, or attempt to sell the property. This is how a normal rent to own would work with perhaps a few small variations. Rent to Own/Option to purchase/Lease with Option to Purchase These are all a varying form of a landlord entering into a contract with a person that want to purchase the property, but for some reason at the present time is unable to do so. This contract normally have an expiration date. The expiration date is normally for 2-3 years. Some might be more but that is the norm. Some contract of this nature will allow a certain amount of your rent that you will be paying to go toward the down payment of the property you plan to purchase under the lease to option contract. Under such a contract the seller might or might not look at your credit as a buyer because the landlord fully expect you to apply and get approved for a mortgage loan thus paying him off, with him not having any further thing to do with the property. The owner would get any tax write off as well as any appreciation in the property, until you successfully execute your option and the transaction close. I hope this has been of some use to you, good luck. "FIGHT ON"