Things You Should Know About Rent To Own Homes

The idea of having your own house to live in is exciting from the searching to the owning then the upgrading and maintaining and it's always a work in progress. Rent to own homes can be appealing especially if you don't have the right resources for directly buying a house.
Here are some things you should consider before you actually get into a deal of renting/leasing to own.

Rent To Own Process

Getting into a rent to own agreement will usually ask you to get into a lease between two to three years, pay and option fee or an upfront down payment, rent rent premium or rent credit. The option fee is typically 1-7% of the arranged purchase price but all the payments you've made will go to the purchase price of the house.

What You Need To Know

The bad news is that if you find yourself in some trouble in terms of payment along the way, all the money you paid before that including rent premium and option fee are forfeited and all of it goes to the seller so that's money wasted. That doesn't mean you shouldn't be renting to own, just make sure that you know what you're getting into before you actually get into an agreement.
The good news is that when there are no oprtions left especially when your credit scores are low, renting to own is something you should consider next because there is a big chance you'll be aproved for this setting.


Monthly Rent And Selling Price

Renting to own means that you will pay more monthly which will then lower the final price of the house you're renting to own. You will be in agreement with the owner on how much you're going to pay.
There will aslo be an agreement that usually takes between one to five years where there will an available option to buy the house.

Rent Premium

Although rent premium isn't refundable, it gives you the opportunity to purchase the home you're living after a set date. Rent premium is likely 5% of the final sales price.

When You Choose Not To Purchase Afterall

As said above, you should be sure if you want to eventually buy the house you're renting lest you want to end up losing money along the way. When you choose to rent to own the house, all payments made are non refundable regardless if the home loses its value.

Local Area Real Estate

If you want to take the plunge but still feeling uncertain, it pays to check out the local real estate status. Is it an upcoming area or is it slowly losing residents? Is it a place you see spending a long time in? Is it safe, is it close to many amenities and such? All these things can contribute to your decision. 

Timeline

The good thing about this is that nobody is forcing you to sign into an agreement without your complete understanding. From day 1 the owner will tell you complete details like the home's final price after the rental period, the timeline of renting the home before you can purchase it, your monthly rent along with the premium and option fee so it's really up to you if you want to continue with the process or not. Just be aware of the step by step procedure, the status of the property and of course if you have enough money to spend on it.