Buy House With Rent To Own Program
What is
Rent to Own?
Rent to Own is an innovative way to purchase your own Home and is a great alternative for people who otherwise are unable to do so at this time. Rent To Own is a WIN-WIN opportunity for all the parties involved.
Rent-to-own is an agreement that you will enter into with either your landlord or a rent-to-own company. You will be renting a home from your landlord or your rent-to-own company, with a portion of your rent going towards an eventual down payment on the purchase of the home. This is known as a “Rent Credit”. You will have the right to purchase the property either during your lease or once your lease expires, however you are not forced to purchase. This can range from one year to five years. Should you choose not to purchase the home, you will lose the rent credit that you have built up.
A rent-to-own agreement binds your landlord to selling the home to you. Your landlord cannot sell the home to anyone else during the option period of your agreement. The option period is the time during which you have the option to purchase the home.
Advantages of Rent To Own
Gives you time to improve your credit and save for a down payment
Lets you lock-in a home purchase price today
Gives you a chance to live in a home before buying it
Allows you to move into your dream home before you can afford it
What You
Should Know
With rent-to-own homes, you can rent the property and have the option to buy it later on
- A portion of your monthly rent payments will be saved as forced savings, which will go towards the eventual down payment for the home
- Rent-to-own investors, whether individual or companies, offer you the flexibility to choose any home available in the market within your and their budget
- If you decide not to purchase the home, you may forfeit some or all of your paid rent credits and initial down payment
- Rent-to-own homes provide an opportunity for individuals who do not have sufficient funds for a down payment to buy a home
- By renting the property in the meantime, individuals can reside in their potential future home while saving up money
- Your rent-to-own agreement can also fix the home purchase price, providing stability and predictability
How does
Rent-to-Own
work?
Renting to own a home involves two sets of contracts: a rental agreement and a rent-to-own agreement. Rent-to-own differs from regular rentals due to the addition of a rent-to-own
agreement, which can be either a lease-option agreement or a lease-purchase agreement.
Lease Option
Agreement
Also known as option to purchase agreements, you are given an option to purchase the home in the future, however, you are not obligated to purchase the home. This means that you can choose to walk away at the end of your lease without any additional penalties.
Lease Purchase
Agreement
In a lease-purchase agreement, you agree to purchase the home at the end of your lease. Failure to purchase the home, such as if you are not able to qualify for a mortgage or if you have changed your mind, can result in penalties.
Whether you sign a lease-option or lease-purchase agreement, an agreed-upon portion of your monthly rent payments will be accumulated to be eventually applied towards the principal of the house. These are known as rent credits. You will lose the rent credits that you have paid if you do not purchase the home. Your agreement will also set out terms such as the purchase price of the home.
