Guide to Rent to Own Homes
Rent to own houses are viable options for people who want to own a home but could not, for the moment, obtain mortgage because of poor credit standing.
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.
A rent to own arrangement is beneficial to the buyer because you can live in the home now while you are getting your finances in order. This will enable you to lock the price of the house and build your down payment credits.
The home owners will also benefit much from this arrangement because this new tenant will already treat your home as his and thus will surely take care of it more than a regular tenant will. The house owner will also receive a non refundable fee down payment from the tenant. The new tenant in the rent to own arrangement will should be interested in maintaining the house well for his own sake.
It is a very important component of the rent to own buying process that your credit be repaired. Having a good credit should be on one of the main concerns that you should be working on. If you want to rebuild your credit standing, you can seek the help of 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.
Buyers and sellers with rent to own agreements should work together. 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.
Each month, you should see to it that you make rental payments on time. 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. With this credits you will be able to build up your additional down payment funds.
Check on the house title to see if it is free and clear. If there are big liens or judgments attached to the home, the seller would find it difficult to close so it is important to make sure about this.
These are the things to be watchful about when entering into a rent to own agreement. If everything is alright then this agreement is viable for both parties. The seller is able to sell his home and the buyers locks into a price and has time to build his credit.