RentToOwn-HouseFinder.com
How does rent to own a home work?
Is it worth it?Anything I should know about this before I start looking into it?
Public Comments
- It's good if you don't have the money to get into a house right now. Typically you set a buy price at the beginning of the term and if the values go up, you are already in an equitable property. The rents that are collected go towards the purchase (sometimes a portion of the rent) meaning that if you are on a 12 month lease with option paying 1000 a month, when it comes time to buy, the seller will give you 12k towards your down payment/non recurring closing costs. It's a good way to go, IMO...
- I do not know all the details, but basicly the one you are renting from owns the place, you pay the morgate, when the house is paid it is yours. If you have bad credit rent to own is a good way to go. Otherwise it is better to just buy your own home because you are paying extra as the owner wants to make a profit. I would contact a real estate attorney for better info
- A rent-to-own house is beneficial in that you can get into a house without great credit. The first poster is a little off in his analysis though in that only a portion of the rent goes towards the purchase price, usually 100-150 dollars per month. Total case scenario.....you pay landlord anywhere from 3000-5000 up front (called an option fee), this is non-refundable, if you don't buy the house. You will then pay market rent or thereabouts. The deal should have already been structured so that the time the option comes up, you will have about 10% already paid into this house....at this point you will be required to go to a bank or somewhere and get a conventional mortgage. Downfall is that most lease options only run for about a year or two.....depending upon your credit, this may not be enough time to clear up any problems you may have.
- Hi Rachel, Whether it is worth it depends on your situation. If your credit is really low, like in the 400's then doing a rent to own home will simply cost you money and you will gain nothing from it. The whole purpose for a rent to own home is to let you have the time you need to straighten out some credit or job issues so that you can qualify for a loan. Here are some guidelines: If your middle credit score is 550 to 579, do a one year rent to own contract. If your score is between 500 and 549, you will need two years to make sure you have enough time to get ready. If your score is in the 400's, then fix it first before entering into a rent to own transaction since this may take longer than you expect to fix. Remember, on a rent to own home you never actually get to own the home unless you buy it. It is just a way to live in the home you want to own right now, and making sure the owner can not sell to anyone else. If you want more information about how the rent to own system works, have a look at http://www.myrenttoownhome.com/rent_to_own_home.php If you want information to help you make the decision whether it is right for you or not, have a look at http://www.rent-to-own-ads.com/renttoowninfo.php
