Rent to Own definitely seems to be the hot topic of discussions in the last couple of years. So what basically 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 home, but you also control the property by having the choice to actually buy it at a later time during your lease period. The property owner cannot market the property for sale, given that he/she is legally bound by the contract to sell the home to you at a pre-determined selling price 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 monthly rent, along with other standard lease terms.
The second part is a Real Estate Option. It is a one way deal that binds the Seller to sell to you at an agreed price. The Seller should certainly sell when you want to purchase (during the option term), but you don't really need to buy if you don't choose to. That is why it is a one way settlement.
Who settles the property taxes and insurance throughout the time of the Rent To Own?
The house owner is liable for responsibly 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 complete the purchase.
We are renting currently, exactly how is this different?
This is a technique to help you get started toward BUYING your own house. Part of your rent payment will go straight into the purchase of the home you are in. Rather than 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, each month a part of your monthly payment (typically 20%) is credited toward the acquisition of the home.
My credit score is less than perfect, could you still support me?
Yes, in a lot of cases most Rent to Own companies are able to assist. Should you qualify for a basic rental agreement, then it's most probably you can be assisted to start your own rent to own deal given you have a minimal up-front payment. The minimal down payment is usually between 2-3% of the purchase price of the house however may differ from company to company.
Can I have my attorney look at the paperwork?
Yes, it's a smart idea to have legal representation nevertheless, if you prefer not to, that's fine also. You are highly encouraged to consult a reputable licensed legal representative however there is no regulation which makes this a legal requirement.
Does the whole entire process operate like a normal sale?
Certainly no, the process works significantly faster as compared to the typical bank process. Approval can normally be granted and sent within several days. From there, the only thing that is required is for you to pay the deposit sign the contract and move in --- it's so simple as that!
Can I refurbish my home?
Most of the time Yes. Assuming that the owner is contacted before any significant modifications and the effort is performed by a professional trades person. Besides, most Rent to Own companies do not have any problem with it as you are enhancing the value of your home which is best for you when it comes to refinancing.
So that you can purchase your own home, in most instances you need to meet the following three criteria:
1. Decent Earnings
2. Less Than Perfect Credit Score
3. 5% Down Payment
In case you're missing one of the three above and you're sick of throwing your hard earned money away, Rent to Own might be a very good option just for you and your family.
What Precisely Is A Rent To Own And Could It Be Perfect For Me And My Kin?
Rent to Own seems to be the hot topic of conversations over the past couple of years. So what exactly is a Rent to Own and is it a good option for people looking to get out of renting and tired of making their landlord rich?
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