RentToOwn-HouseFinder.com

I am a home owner (mortgage holder) and I am interested in letting some friends "rent to own" my house.

What kind of contract do I need to draw up in order to legally do this? Also, how can I get around the option consideration fee? I would like to come up with a simple rent to own agreement, but I am unsure of how to do this. Do I need to consult a lawyer? Basically I just want them to take over my mortgage payments, as I got a job out of state and will be moving soon. What should my next step be? Any helpful resources would be much appreciated.

Public Comments

1. Depending on how long you have been paying on your home and if prices have gone up or down for real estate in the area you should take your friends to the bank you have your mortgage with and see if they can change over the loan to them and show you at a loss of the money you had put into it at that point so you can deduct it from your taxes this year. If yo need to co-sign do not do it. They can all find a better cosigner than you as you will not want to be tied to the house once sold.
2. You are not a "mortgage holder," you are a "mortgagor," which is the opposite. If your mortgage is one of the rare assumable ones you can sell it to them for the mortgage balance. If not you can contract to sell it to them contingent on their getting a new mortgage. If that's out of the question you can "sell" it to them under an "agreement for deed" or rent it to them with an option to purchase. The "option" fee doesn't have to be a lump sum; it can be consideration for the rental or a small sum paid as part of the rental each month. You really need a lawyer to properly draw up the document & advise you on your best options & risks. Remember until you get out from under the mortgage you are fully liable for it and will be crippled in any effort to finance a new purchase. If they should stop paying you'll have both the rent in your new place and the mortgage, taxes, etc on the old place to pay. You are taking a big risk on your "friends," who apparently are not a good enough credit risk for a bank. I advise all my clients to never lend $$ to a friend; or you will lose both your $$ and your friend.
3. There are many places that offer this contract. Most office supply stores offer a lease to purchase contract. I wouldn't go through the expense of a lawyer for something like this but it certainly doesnt hurt if you want to be sure you have everything covered. A title company may be able to help you as well since most of them have a legal department and will cost less than an attorney.