| "body"> | | | | With a lease-with-option-to-buy, a renter signs a lease |
| Finding a rent-to-own house is one of the many ways | | | | agreement (often for ashorter period of time, like1-2 |
| someone with bad or nocredit can buy a house. You | | | | years, but it could be longer). The renter/buyerusually |
| will often find them called names like lease/options, | | | | pays a sum in cash, usually non-refundable, to the |
| lease with option to buy, lease purchase, lease 2 | | | | owner in agreement tobuy the house at a later date |
| purchase, rent with option to buy, rent to own, or rent | | | | for the price agreed upon. The renter has the option |
| to buy homes. | | | | orright to buy the home, so in the end they have a |
| There are a few differences between rent-to-own | | | | choice and can back out it theywant. Some of the rent |
| and lease-option agreements,although many people | | | | paid may or may not go towards the purchase price |
| use the terms interchangeably. With a rent to own (or | | | | of thehome. |
| rent tobuy) home, the buyer makes an agreement with | | | | This is a technique often used by real estate investors |
| the owner that part or all of the rentmoney will go | | | | in periods when the interestrate is rising fast. This way |
| towards the down payment of the home, and at a | | | | they hope to buy the home at a lower interest rate on |
| certain date,perhaps 2-5 years in the future, the renter | | | | alater date. In the meantime, they will sublease the |
| will purchase the home, using the moneythat was set | | | | home to someone else, who willmake the payments |
| aside as the down payment. | | | | for them. |
| There is usually not much money put down in the | | | | Again, the terms "lease option" and "rent to buy" are |
| beginning, outside of what wouldnormally be needed | | | | pretty much usedinterchangeably today, so check with |
| for a rental home, so this is a good way to get into a | | | | the owner to find out exactly what terms theyare |
| home forlittle or no down payment. | | | | offering. Or approach an owner with your own offer |
| Another advantage to a rent to buy situation is that if | | | | for renting to own. |
| you compare how much rentmoney is applied monthly | | | | If you are a renter who is tired of paying someone |
| to the home price, even if it is only 25-50%, it will still | | | | else's mortgage and want to ownyour own home, this |
| bemuch more money paid on the principal of the | | | | is one of many ways that you can buy a home. One |
| house than if you had taken out aloan for it. If you look | | | | of thedrawbacks is that you will still need to purchase |
| at how much money goes to the principal payment of | | | | the home at a later date. This maybe a problem if you |
| a homewith a typical mortgage loan, you will find that | | | | have bad credit, because you may still need to qualify |
| most of your mortgage payment inthe beginning is just | | | | for a loanwhen it is time to purchase the home. If your |
| paying interest on the loan. A rent to own agreement, | | | | credit can be repaired in several years,this may be a |
| wherethe money goes directly to the payment of the | | | | great way for you to get your home now, and good |
| home, could be saving you a lot ofmoney in the long | | | | motivation to cleanup your credit for the future. |
| run. | | | | |