Affordable Rent 2 own Homes near you
Don't just rent.
Affordable Rent 2 own Homes near you
Don't just rent.
Become a home OWNER!
Rent to Own is an excellent alternative for those who want to buy but don’t yet have enough of a down payment saved for the home or they are working on improving their credit scores. Maybe for people who want to move into a home, but don't want a mortgage yet, this can be a great alternative. With this Rent to own, a portion of the rent goes toward buying the home, giving time to work on getting the down payment, at the same time living in the home as a renter. They can work on their credit score, pay bills on time, and increase their credit score to qualify for a mortgage.
When you rent to own, you enter into an agreement where you commit to renting a property for a predetermined period of time. You then can have the option to buy the home you are already living in. The lease typically includes a smaller down payment and a monthly ‘premium’ that is allocated toward the price of the house. The price is determined and written into the lease agreement. It does not change at the end of the lease. Just or example, with easy numbers, you and the seller/landlord agree on a price of $100,000. Say you give a down payment of $10,000, and $250 of the monthly rent is allocated to the price for a period of two years ($6,000). At the end of the lease, you have built up $16,000 toward the home price of $100,000, leaving a mortgage in the amount of $84,000.
Rent to own works for both buyer and seller. While a buyer is getting their finances in order, a seller can feel reassured about a prospective homeowner taking care of the property. Buyers get the time they need to save and lock in the price of their desired home. If the buyer walks away at the end of the lease, the seller has the added premium and the down payment as compensation for the delay in selling.
Rent-to-own has risks as well. Sellers run the risk that a tenant will not go on to buy the home, making them start again. An increase in interest rates is also a potential risk for buyers. Since the home price is locked in, a drop in value is always a risk. Home buying comes with inherent risk.