If you have considered buying a home but have run into obstacles, a rent to own program could be the answer. Rent to own programs usually entail paying a small three to five percent deposit, or option to buy. Then, a portion of your rent each month goes toward the purchase price of the home.
At the end of the lease agreement, usually two to three years, you then purchase the home for the price agreed upon at the beginning of the agreement. This gives you two or three years to overcome obstacles to a traditional mortgage, such as employment stability or credit score, while still paying toward your home’s down payment.
There are several reasons why rent to own program can be a big win for you and your family. While there are some scam artists out there with rent-to-own programs, there are also plenty of reputable sellers and real estate investors who offer this option. If you are smart a rent to own program could be your needed answer to homeownership.
Build Equity Right Away
It is possible to build home equity right away when you rent to own. If you make improvements to the property during the lease period, or if housing prices increase in the neighborhood over the period of the lease, it will be worth more than you are paying for it when it comes time to buy. You could wind up starting out your mortgage with up to 20 percent equity right off the bat.
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Susan McCullah is an established writer who has created dozens of informative articles about credit scoring, identity theft, budgeting, taxes, debt, and finance. She has worked in the Credit Reporting industry for 15+ years and is FCRA certified. Susan regularly conducts in-person presentations and webinars on the topics of credit scoring formulation, raising credit scores, and identity theft.
