Just What Is A Rent To Own And Is It Really Ideal For Me And My Household?

Rent to Own definitely seems to be the hot issue of conversations over the past couple of years. So what specifically is a Rent to Own and is it a good idea for those looking to get out of renting and sick and tired of making their landlord wealthy?

A rent to own is where you lease a house, but you also control the property by having the option to secure it at a later time during your lease period. The property owner cannot market the property available for sale, since he/she is bound by the agreement to sell the home to you at a pre-determined cost that you agree on before you decide to move in. There are two parts to the contract:

The first is the standard lease that spells out the regular monthly rent, and other standard lease terms.

The second part is a Real Estate Option. This is a one way settlement that binds the Seller to sell to you at an agreed price. The Seller should certainly sell if you wish to buy (during the option term), but you don't need to buy if you don't choose to. That is why it is a one way settlement.

Who settles the property taxes and also insurance during the Rent To Own?

The property owner is responsible for paying the tax and house insurance. You will be responsible for paying the monthly rent (that remains the same for three years) and utilities until such time you actually carried out the purchase.

I am renting now, just how is this different?

This is a technique to help you get started toward BUYING your own house. A portion of your rent payment goes towards the purchase of the home you are in. Instead of throwing your hard earned money away each month on rent and having practically nothing to show for it towards the end of the year, with Rent to Own, month after month a portion of your monthly payment (typically 20%) is credited toward the purchase of the home.

My credit score is less than perfect, could you still support me?

Definitely, in many cases most Rent to Own companies can assist. If you qualify for a basic rental agreement, then it's most likely you can be assisted to start your own rent to own deal given you have a minimal up-front payment. The nominal down payment is typically between 2-3% of the purchase price of the home but may vary from company to company.

Can I have my attorney look at the paperwork?

Yes, it's a smart idea to have legitimate representation however, if you choose not to, that's fine as well. You are highly encouraged to consult a reputable licensed legal representative however it does not have any law that makes this compulsory.

Does the entire process operate like a normal sale?

Certainly no, the procedure works a whole lot faster than the usual bank method. Approval can normally be granted and sent within several days. At that point, all that is needed is for you to pay the deposit sign the agreement and move in --- it's as easy as that!

Can I refurbish my home?

Most of the time Yes. Assuming that the owner is approached prior to any major changes and the labor is performed by a professional trades person. Besides, most Rent to Own companies do not have any difficulty with it as you are improving the value of your home which is good for you when it comes to refinancing.

So that you can purchase your own home, in most instances you should meet the following three criteria:

1. Good Income

2. Good Credit Score

3. 5% Down Payment

In case you're missing one of the three above and you're sick of disposing your hard earned money away, Rent to Own may be a great option for yourself and your family.

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