Surprising Benefits of Rent to Own Homes
Renting
Rent to own homes are an interesting thing. While there not something that many buyers come across, they have a good selection of benefits for would-be homebuyers. If you’ve ever wondered about the benefits of rent to own homes, or are considering getting into one yourself, learn more about them here.
What is a Rent to Own Home?
Rent to own contracts work like this: A buyer pays a small percentage of the purchase price, typically about 5%, and then pays additional rents every month throughout the term of the contract. The agreed-upon rent pays the mortgage on the home, and the rest are used to count toward the overall price of the home. When done right, this agreement can be a fantastic way for a first-time homebuyer to purchase a home, and may afford the ability for people who could not otherwise buy a home to step into the ranks of home ownership.
What are the Benefits of Rent to Own Homes?
The benefits of rent to own homes are many. For one, buyers in rent to own contracts have time and leisure to build their credit history and become desirable lenders as they rent the home and pay down the purchase price. What’s more, a rent to own agreement allows the buyer to pay down the purchase price slowly, rather than with the help of a huge loan. Rent to own homes also allow buyers to secure an immovable purchase price and purchase terms from the get-go, rather than having to worry about them down the line.
Is Rent to Own a Smart Idea for You?
If you’re currently renting a home, have a good relationship with your landlord, and know that the landlord wants to sell the home in the near future, renting to own may be a great option. Be advised that some rent to own contracts allow you to opt out of the purchase at the end of the contract, but you won’t get a refund if you make this decision.
If you’re considering a rent to own situation, it’s wise to look at your finances and desires. If you could qualify for a loan right now, you may be better off going the traditional route. If a loan is out of your reach though, a rent to own situation may give you the time and space you need to build your credit history and become a desirable lender so you can take out a loan down the road.
When executed intelligently, rent to own contracts can be a fantastic way for new buyers to get the home of their dreams without jumping through many of the hoops of traditional home ownership and purchasing.
