8 Lessons Learned: Houses
Understanding Rent to Own Arrangements
If you are someone who is desperate to buy your own home but is hindered because of your poor credit score which does not qualify you for a mortgage presently, then finding a rent to own home is the best option for you.
With a rent to own arrangement you would have enough time to improve your credit score, accumulate credits for monthly rentals, and save money for the down payment for the house.
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. With this arrangement the price of the house will be locked and you can start building your down payment credits.
Having a rent to own tenant is more beneficial to a home seller since this type of tenant will natural care more for the house which could someday be his, than a regular tenant who will just leave when the tenure is finished. The seller will also collect a large 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.
Repair of your credit score is very important in the rent to own buying process. Throughout the option period you should be working proactively on having a better credit score. 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. The seller, on the other hand, works with the future buyer to ensure that they remain on track to purchase their home.
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 not, you might have a difficult time getting financing. 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 duty is to ensure that your rental payments are paid 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. The buyer should ensure this, otherwise the seller would find difficulty in closing if the house has big liens or judgments.
If you are going into a rent to own agreement, then should consider the things discussed above. 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.