What is a rent to own home/ do you need to be able to get a morgage for one?
What is a rent to own home? Also if you want a rent to own home do you need to be approved for a morgage?
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Posted on
08/17/11 Total Answers
2
Answers-
On a rent to own, you are buying from the owner. They will do the credit check, but there is no mortgage, just you paying them each month.
Answer by :
the tax lady On Date
2011-08-17 15:27:22
Rent to own is an option some land lords give tenants. It involves you paying an additional amount (above and beyond the rent) that is applied toward the future purchase of the home. In most cases it is a fair option that basically allows for you to save up a downpayment that cane be applied toward buying the home at a lower fixed cost. I say lower because typically a house goes up in value in the future, so you are locking in a sale price now. Also you do not need to qualify for a mortgage, because this is an agreement between you and the landlord/owner.
BUYER BEWARE
But I say that in most cases it is fair. Some cases it is a scam. You have to read the terms and conditions of the Rent to Own agreement VERY CAREFULLY (in fact you should take it to an attorney in your area and let them review it). Some landlords have clauses in thier agreements that say things like:
If you are late with a rent payment you void the agreement and lose all of the extra money you were paying to own
If you violate the lease in anyway, you lose that extra money.
Remember, a landlord can put just about anything he wants into one of those agreements (as long as it doesn't violate a law) and as long as you sign it...your on the hook. Some landlords are actually betting that you will violate the agreement so that they can keep all that extra money. So unleass you fully understand the agreement, and can stick to your end of it..I would think twice about it. Take it to an attorney you trust and get it reviewed.
