RentToOwn-HouseFinder.com - Does anyone know about Rent-to-Own a home? How does it work? And how many different ways can you do it?

Does anyone know about Rent-to-Own a home? How does it work? And how many different ways can you do it?

We just started renting a house that we got to raise our three grandchildren in, and we'd like to make it permenant. We want to give them a secure future and want this house for them. Unfortunately we, do not have good credit, yet our landlord seems open to this. However, we are ignorant about it. Can someone educate us on Rent-to-Own a home? Thank You for any help you can give us. JoyBird

Public Comments

Rent to own or lease to purchase will be a good choice for you. What will happen is that a certain portion of your rent will be applied toward the purchase of your home. You will have to work with your landlord to have a time frame as to when you will purchase the home. etc..6 months to a year. Make sure that you discuss the purchase price now so you can lock in the price. Also seek legal advice to protect your interest in the home.
"Rent to own" is for people who have bad credit... Its sometimes called a "contract sale" You have a contract written up. You pay more than you would have if renting. The contract normlly includes: A down payment Large fees for late payments Loss of all that you have paid if you miss a payment, and you can be evicted. Some will allow only up to 5 days late payment (with a large per day fee) before the payment is considered to have been missed. If you want/need to go this route... BE SURE you NEVER miss a payment!
There is many ways to do it..And a perfect way to start. Just do a search on it and you will get the best info. Keep in mind, for your situation, It will help you perfectly... Good Luck!
Renting to Own can be costly and tricky if you're not careful. Most rent to own programs will have a lease for a set amount of time - example two years. During that time, a certain amount of your rent will be credited to you as payment for the home. So let's say your rent is $1000 a month; $200 of that may be put towards your purchase. At the end of the lease, you will then be expected to "purchase" the home. Therefore, you must be qualified for a mortgage loan from a lender. The $200 you paid every month will go towards your purchase. If you do not come up with a loan at then end of your lease, your leasor can technically require you to vacate (with notice) and you lose your credit towards the home because you defaulted on the agreement. Be very careful about rent to own. They are more for people who have questionable credit (can't qualify at present time), and have trouble saving for a down payment.
Usually you pay rent and some of it is set aside towards your down payment until you reach the amount you agreed upon as a down payment. Then you go thru the processes of buying the house just like any other person would because they had the needed funds for the down payment. You should have a good real estate lawyer to help you with the purchase. When I bought my house the lawyer got 1% of the selling price as his fee but that was in 1966.
buying a home,whether it be through a bank or rent to own,can be set up any way the owner and yourself deem it to be. Generally, in a rent to own situation, the renter usually puts down anywhere from 2K to 5K. Then the monthly rent let's say is one thousand dollars, about two hundred of it goes to ownership and the rest to rent with a three to five year buy out. Nothing is set in stone. The good part for you, building equity while you live in it and control of the home. Bad part, you can be a few days late if the contract is very strict and lose everything you put dwn. You can decide at anytime to walk away but will lose what you have invested in it. The money down, the money towards the buy out of the rent and the buyout term are all very negotiable. The more motivated the seller, the better terms you can negotiate. Hope this helps.
if its rent to own you needs to read the fine print.why? because you may think the money you are paying is going to the payment of the house but in reality only a portion on of the rent is actually paying the princible amount. now I dont know what the contract is or if you even have one but I am willing to bet if you get behind on the rent then all the princible amount is gone but they wont toss you they may let ya slide a while then at a moment in time BOOM you will be put out. I dont trust any rent to own plan. what sounds too good to be true . is too good to be true. read the fine print.if you can afford the rent and the contract has your rent locked in and you know YOU have to do the maintenence and you know THEY will pay the taxes and you KNOW that if the renter is not gonna croak and leave your house to his nephew that dont know about the handshake rent to own plan on the shack . you know?
I have done this a few times. make sure you get an attorney. Make sure a certain percentage of your rent goes to buying. Make sure you have a purchase price in the contract. Not what the home will be worth in 5 years etc. With housing values going up each year you need to lock in a price now. make sure you don't have any prepayment peality. Have you thought about just buying the home now? There are places that grant down payments for first time home buyers. www.libertygrant.com . By at least not haveing a prepayment penality you can try and get a mortgage anytime. Right now interest rates are still low as compaired to 10 years ago.
in CA it is called a Lease with Option to Purchase, credit counts as much as for a loan if the seller is smart
you will need to give your landlord some earnest money, to show that you are serious about purchasing the house. If you don't have the credit ,there are companies that will buy the house for you "temporarily" until you build credit.