When Renting to Own, Will I Pay Closing Costs?
If you're in the market for a rent-to-own home, you may be wondering if you will pay closing costs on the contract. Find out here.
Benefits
There are benefits to both the owner and the buyer on a rent to own contract. Two of the main benefits for a buyer is that you likely won't have to pay closing costs and there likely won't be a down payment. In fact, one of the main reasons a buyer might want to look into a rent to own contract is that they don't have an initial down payment. Other fees/ interest may apply.
Escrow
Unfortunately for buyers, there are other costs that will go into a rent to own contract. One, in particular, is escrow fees. In layman's terms, the escrow fees are the costs that go into all of the paperwork that must be filed in the instance of a
home purchase.
Interest
So, no, it is not likely that you will pay closing costs on a rent to own home. You may pay a little more in interest or filing fees, but it may work out in your best "interest" nevertheless.
Conclusion
If you are interested in buying a home, but other factors have prevented you from doing so, such as credit score issues or difficulty accumulating a down payment, then a rent-to-own home may be the perfect option. There are small, but significant differences that will occur between the two differences, in this case, whether you will incur closing fees. In this case, the odds are in your favor, in others it is always important to ask. Rent to own homes are a step in the right direction for homeownership, and we are glad this is an option you are considering. What are some of your experiences?
