How does rent w/ option to own work???

Question

I dont have great credit anymore anymore. I would love to own a home again but i am positive i dont qualify for a mortgage right now. How does it work to rent to own? What is the process to doing this?

Answer 1

You just basically have two contract. You have a rental agreement, but you also have a lease to purchase option contract.

couple of notes to pay attention to:
Often they want a deposit that will be used toward the purchase when you execute your purchase option. You may be able to negotiate out of this.

Make sure a portion of your monthly rent is set aside to go toward purchase as well.

Make sure you find a house that you really want because most of hte time if you don't execute your purchase option you lose the extra rent money and any downpayment you gave!

Best of luck to you. Contact me if you need a blank contract to use..
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Answer 2

Rent w/option to buys works like this........
Example: Rent for 3 BR 2 bath house is $2500/month
a percentage of the $2500 (agreed upon buy you and the seller) goes into an escrow account towards the down payment of the house for a specified period of time.
You will eventually have to obtain a mortgage.

Answer 3

You agree up front with the owner of a property on how much you'll buy it for and an interest rate, then you rent for a specified time period and a portion of your rent goes toward the purchase price. Usually there's a provision that at the end of a particular period of time, you need to get financing for the balance.

Answer 4

Renting products/ appliances can apply the rental payments to the cost of buying the object from the merchant that is allowing you to have it. Rent to own costs more than buying the product outright. Yet the payment history is newly created credit for you.