Like all great agreements, renting to own is beneficial to both the homeowner and the tenant-buyer.
But, let’s take a look at the advantages for you as the tenant-buyer.
In a rent to own agreement, you, as the tenant -buyer, lock in the option price on the home for a year or two in advance of when you’ve agreed to close on the purchase. Since most markets appreciate, you’re locking in a good deal with built in equity.
During your time as a tenant buyer, you’re making payments that will show a mortgage broker that you can afford to live there, which will help you qualify a loan. You will also have your down payment taken care of because you put down an option fee down payment that will count towards the purchase of the home, once you exercise your option to buy.
You also have the ability to test drive the house, the neighborhood, the school system, etc, prior to buying. If it turns out you were wrong about the whole thing, renting to own is a lot less expensive than purchasing the house outright and finding out you’re stuck with it later.
The extended closing date allows you the time to clear up any credit issues, for closing cost, and get pre-qualified for a loan. When you meet with a mortgage broker you’ll understand the amount of debt you can shoulder each month and still be approved for a loan. You’ll also discuss down payments and loan types, making you a well informed future borrower.
Essentially, renting to own gives you the time to get your everything in order while you’re living in your dream home.
If you’re ready to see how this could work for you, contact us and we’ll answer all your questions.