The Best Way to Utilize Rent to Own Homes
It’s no secret that most people seek out Rent to Own home options over traditional mortgages because of credit issues: either their credit is fair or poor or simply just unestablished. Depending on the housing market, banks may be very strict with their lending. So what are the major differences?
Behind the Banks
Well, Rent-to-Own homes are arranged without any bank involvement. Many people may use a lawyer to protect themselves or a
realtor to have good counsel. But, there are no banks or bank loans involved. Rent-to-Own homes are often referred to as Owner-Financed homes because the “lending” falls on the owner/seller.
On Your Terms
Now this is where it gets a little tricky. RTO transactions are usually 24-36 month agreements where the party interested in purchasing the home essentially “rents” it from the owner. Their “rent” payments go towards the down payment of the house. Once the agreed upon time has passed, the renter can then choose to purchase the house.
Establishing a Downpayment
They typically complete the purchase by using the
down payment built from those “rent” payments and a bank-backed loan, after spending time fixing or establishing their credit. Find out if an RTO home is the right property for you and check out listings around you today.
Conclusion
In a world where it feels like your credit score is everything it is nice to know there are other options, especially when considering becoming a homeowner. For some this can save money over time, especially in certain geographic areas where rent seems to be higher than the average mortgage monthly payment. When buying a home, it is important to consider several options before deciding how you will gain ownership of your dream home. Find out if an RTO home is the right property for you and check out listings around you today.
