Guide to Rent to Own Homes
The best option for people who want to own a house but could not presently get a mortgage because of poor credit standing, is to look for a rent to own house.
Within 6 to 24 months, it will be possible for you to rebuild your credit, accrue monthly rental credits, and save money for your down payment.
The benefit of the rent to own arrangement to the buyer is that you can already live in that house until your finances are well in order. This will enable you to lock the price of the house and build your down payment credits.
To the seller, this arrangement is also beneficial because the tenant living in their home will definitely take care of the house more than the typical renter. The seller will also collect a large non-refundable fee down payment from the tenant. When it comes to house maintenance, the new tenant will definitely have an interest in this until the end of the option period.
Repair of your credit score is very important in the rent to own buying process. You must be proactively working on having a better credit throughout the option period. It is best to work with a respected lender or credit repair firm to help you rebuild your credit standing. Meanwhile, the seller and the future buyer should work together to ensure that they are not distracted in the goal of purchasing the house.
It is better to work with your rent to own seller like a team. They both need to make sure that they have the correct value of the property. If you are trying to get financing and the valuation is incorrect, then you might have a difficulty in this. If the house does not appraise for the agreed upon sales price, the seller needs to step up and renegotiate or risk losing the deal altogether.
You should be making rental payments on time each and every month. At closing time, this will be to your own benefit because your lender will be able to use this on time document payment history.
If you pay the monthly rental payments on time, and the seller must be willing to credit you for this. This will help asset you to build additional down payment funds.
Make sure that there are no encumbrances with the title of the house. You should look into this because the seller could have difficulties closing if they have a big lien or judgment attached to the home.
These are the things to be watchful about when entering into a rent to own agreement. For the most part it is a viable option for both parties. The home is sold and the buyer is able to buy it with the locked price and has time to build his credit.