inding a rent-to-own house needed for a rental home, so this
is one of the many ways is a good way to get into a home
someone with bad or no for little or no down payment.
credit can buy a house. You will
often find them called names like Another advantage to a rent to
lease/options, lease with option buy situation is that if you
to buy, lease purchase, lease 2 compare how much rent money is
purchase, rent with option to applied monthly to the home
buy, rent to own, or rent to buy price, even if it is only 25-50%,
homes. it will still be much more money
paid on the principal of the
There are a few differences house than if you had taken out a
between rent-to-own and loan for it. If you look at how
lease-option agreements, although much money goes to the principal
many people use the terms payment of a home with a typical
interchangeably. With a rent to mortgage loan, you will find that
own (or rent to buy) home, the most of your mortgage payment in
buyer makes an agreement with the the beginning is just paying
owner that part or all of the interest on the loan. A rent to
rent money will go towards the own agreement, where the money
down payment of the home, and at goes directly to the payment of
a certain date, perhaps 2-5 years the home, could be saving you a
in the future, the renter will lot of money in the long run.
purchase the home, using the
money that was set aside as the With a lease-with-option-to-buy,
down payment. a renter signs a lease agreement
(often for a shorter period of
There is usually not much money time, like1-2 years, but it could
put down in the beginning, be longer). The renter/buyer
outside of what would normally be usually pays a sum in cash,
usually non-refundable, to the check with the owner to find out
owner in agreement to buy the exactly what terms they are
house at a later date for the offering. Or approach an owner
price agreed upon. The renter has with your own offer for renting
the option or right to buy the to own.
home, so in the end they have a
choice and can back out it they If you are a renter who is tired
want. Some of the rent paid may of paying someone else's mortgage
or may not go towards the and want to own your own home,
purchase price of the home. this is one of many ways that you
can buy a home. One of the
This is a technique often used by drawbacks is that you will still
real estate investors in periods need to purchase the home at a
when the interest rate is rising later date. This may be a problem
fast. This way they hope to buy if you have bad credit, because
the home at a lower interest rate you may still need to qualify for
on a later date. In the meantime, a loan when it is time to
they will sublease the home to purchase the home. If your credit
someone else, who will make the can be repaired in several years,
payments for them. this may be a great way for you
to get your home now, and good
Again, the terms "lease option" motivation to clean up your
and "rent to buy" are pretty much credit for the future.
used interchangeably today, so
About the Author:
By Alexis Dey. "© 2005 Mohave Publishing. All rights reserved. http://I-can-buy.com. For more ideas on how to buy a house when you can't get a home loan, look for our exclusive FREE e-book, "Buying a Home When You Have Bad Credit," which can found only at http://I-can-buy.com . Check it out now!
Source: www.isnare.com
