Facts About Rent-To-Own
The fluctuations in the housing market have brought many alternatives to the forefront. Previously, there were many sellers who were on the lookout for affordable yet beautiful and comfortable homes. However, there weren’t many choices as sellers are hesitant to sell their properties on prices that are way too low than their investment costs. Individuals have also learned that it is sometimes more economical to purchase their own homes than to spend the rest of their lives renting spaces for dwelling. With these changes, sellers and buyers have met in the middle and arrived at more comfortable ways to sell properties while allowing individuals to have cheaper options to own their dream house. This is through rent-to-own properties.
Rent-to-own is a process deemed more favorable to both buyers and sellers who are uncomfortable with conventional sales transactions. In this method, buyers are allowed to live in a property in a stipulated time frame paying rental fees pegged for that definite period. Then, final sales transaction occurs to settle the remaining amount for which the property is tagged for sale. This is like buying the house but with the payments given in chunks. When analyzed, this is far more favorable to the budget of the buyers as compared to having to pay huge down payment to purchase a house.
This is also more favorable to buyers who don’t have good credit standing and as such cannot qualify for mortgage loans to avail funds for the down payments. In turn, the time consumed by individuals living in rent-to-own houses can be used to improve credit ratings. With a repaired credit score, the buyer can avail of more funds from financial institutions to support the house purchase.
Sellers also grab the chances offered by rent-to-own processes. Many of them are aware of how depressed the market situation can be making it difficult to sell properties or even to find potential buyers. Buyers are offered a lease option to allow them to generate more funds for the final sale transaction. The buying party must utilize the stipulated time to work toward the purchase before the agreed date expires. When this part of the deal is left unfulfilled, the seller has the right to revert the agreement to a standard lease. All monthly premiums are retained by the seller and the down payment will have to be repaid in full or in part depending on what the seller and the tenant-buyer have agreed upon.
If you are planning to purchase a house through a rent-to-own process, there are many things that you should clearly understand about it. If you want to know more information, you are always free to contact your local real estate agent.