See if you're a Candidate for a Rent-to-Own Home

Sometimes events in life may prevent you from purchasing your own home. Common issues getting in the way of home ownership include not having your finances in order, your credit score may need improvement, or perhaps you do not have a full down payment available. The good news is that these situations do not need to get in your way of becoming a homeowner; you may still be a candidate for a rent to own home option.

A rent-to-own agreement allows you to move into the home of your dreams right away, giving you the chance to “lock in” the price of your house. You now have a home to live in, at a locked-in rate, while working on getting your finances in order. This opportunity can also help to improve your credit score and assist in saving money to purchase the home.

While you may be a good candidate, it's important to ensure you take the time to educate yourself about the rent-to-own process before leaping in.

A Rent-to-own opportunity creates a legal binding contract between you and the landlord/seller. The terms must be written down in the form of a contract and agreed to prior to continuing. While each contract is different, there are some elements that must be addressed to protect both the seller and buyer. Make sure you research your rights and understand the terms of the contract before you sign.

In a rent-to-own agreement, there is an understanding that the individual purchasing the home will rent the property for a set amount of time. The amount of time the buyer will rent the property depends on their individual agreement with the seller. This can be as short as a year, or as long as several years. While you are renting you will live in the home and pay an increased rent with a percentage going towards the purchase of the house.

At the end of the rental period there will be an expectation that you will purchase the house through a lender and mortgage company. If you are not ready to purchase the home at that time, or are unable to get financing, you may lose any option money and rent equity you have already paid. These amounts could be substantial. You could also lose the option to purchase as well as face legal repercussions for not meeting the contract. It's important to have confidence in your ability to use the set time to rebuild bad credit, save money and have your finances in order so you can achieve the dream of owning your home.

Remember the terms of a rent to own contract are critical to your success in purchasing the home. When negotiating your contract be sure to get either a real estate agent or an attorney to help you create the terms that will help you to succeed.

A candidate for a rent to own can be someone who has the ability and willingness to use their time and rent equity to their advantage. You could be that person, building rent equity, saving money, rebuilding credit and getting finances in order to purchase your dream home, all while enjoying the comforts of living in the home under a rent to own agreement you negotiated to meet your needs.

To find opportunities that meet your needs, browse our local rent-to-own home listings in your area.