Deciding If a Rent-To-Own Home is a Good Idea for You

A rent-to-own home can be a good idea when you have a good understanding of the ins and outs of a rent-to-own agreement. A big factor when deciding whether a rent-to-own over a traditional purchase is better for you, is that rent-to-own homes offer a lower down payment and the opportunity to save up money before actually taking the plunge to purchase. As an added bonus, you get to live in the home through a rental lease prior to taking out the loan for the mortgage. Buying a home is a big decision, and not everyone is in a good financial place to afford a traditional mortgage. This makes a rent-to-own home a more financially responsible choice for many families.

Take some time to review the pros and cons to give you a better understanding of what makes a rent-to-own lease agreement unique so that you can make an informed decision.

When is a Rent-To-Own a Good Idea?

  • If a tenant's plan is to rent a home, a portion of the monthly rent will go towards the home and provide equity to the home.
  • The rental period, typically two-to-five years, provides time for a tenant to improve credit, qualify for a mortgage and prepare for homeownership.
  • The rental period also allows a tenant an extensive amount of time to save towards a down payment for a future home.
  • If a tenant chooses not to move during the rental period, their money will successfully go towards the purchase of the home.
  • If a tenant has the means to hire a real estate attorney before signing the agreement, it will contain all the key provisions, making it a favorable contract.

When is a Rent-To-Own Home a Bad Idea?

  • If a tenant chooses not to purchase the house at the end of the rental term, all the money allocated towards the purchase price will be forfeited.
  • If a tenant does not have the means to hire a real estate attorney before signing the agreement, an unscrupulous owner may include unfavorable provisions.
  • If a tenant has bad credit that does not improve by the end of their lease term they may not qualify for a mortgage.

If you're in the market for a rent-to-own home and it sounds like a good idea then go ahead and take a look at our rent-to-own home listings to find a home that is right for you.

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