RentToOwn-HouseFinder.com
What is a rent to own house?
I dont understand how these work i ran into quite a few rent to own listings while looking at houses to rent. I didnt find much about them on the internet. Do you pay your monthly rent and something like a morgage payment as well? Do you eventually buy the house from the owner or do you still take the loan from the bank?
Public Comments
- rent acts as a downpayment in most cases but beware read the fine print...
- In some cases a portion of the rent can later be applied to the down payment. the idea is for you to build your credit rating - if it was poor - or allow you time to amass additional funds and still get the house you initially saw.
- A rent to own agreement is between the tenant and the owner of the property. This is completely normal and has been coming up more often because of the current real estate market conditions and sellers are unable to sell their homes. You would enter in to it if you wanted to rent this property with with the intention of possibly buying it from the owner down the road. It is a great way to really experience a home and see if its right for you before purchasing.
- Rent-to-Own implies on thing but means another. A LOT of people lose money on these schemes because it is not explained properly where your rent goes. And you cannot get any of it back once you do find out.
- This arrangement depends on the contract. This can also be called a seller financed mortgage. You pay "rent" or "mortgage" payment, property taxes (in many cases), utilities, and upkeep. Many of them are set up for a set amount of time - like 10 years. When the contract is up, you either have to come up with financing or with the balance due (called a balloon payment). It can be a way to own a house if you don't have the traditional resources to do so. But the details are in the contract - be sure you read and understand everything before you sign!
