Rent to Own Option as a Way of Becoming a Home Owner
Owning a house can take different paths one of them is agreeing to a rent to own contract. A rent to own contract is one with an option to purchase the home one is renting on a predetermined price when the rental period expires. The moment you pay the rent , a portion of it goes to equity and building your credit. In exchange the home buyer is allowed to purchase the home on a settled price regardless of where the value of the real estate goes. This option is not to mean that you are forced to buy the house when your rent period has come to an end.
The part of the funds are not taken as security deposits, they just serve to lock the negotiated value at the current moment regardless of the real estate value will go up. There are instructions to make sure that you observe if you have taken out this contract, you have to treat the property as a rental and make sure that you pay rent on time. If you wish to make some changes to the property you have to get the approval . The rent that you will be paying in a rent to own house will be slightly higher to have the portion that is directed towards the actual purchase of the house.
Depending on how you look at it is similar to committing yourself to a forced savings plan only that this one is towards making a down payment at the end of the contract. Many rent to own agreements will also require the person buying the house eventually to arrange for some minor repairs to the house. A house could a require some major repairs but that falls the home owner until the option is exercised. Rent to own homes also help the renter to develop good credit ratings that will help them emerge from prior financial tight spots.
As the person taking the contract make sure that the property in question has been inspected by a qualified property inspector and approved. A good rent to own company will put you in touch with an inspector before you can make any major decision on the property in question. Some companies are good enough to allow you to check out the neighborhood where the property is before you can commit yourself to seeing the contract through. In some environments it is difficult to qualify for mortgages on homes, rent to own becomes a good option in such cases.
3 Homes Tips from Someone With Experience
Property: 10 Mistakes that Most People Make