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A rent to own program is a unique financing agreement wherein a lessor agrees to collect monthly rent payments from a lessee for a specified period of time, after which the lessor transfers the title to the property to the lessee. These agreements are popular in the world of real estate, especially with low-income families who may have difficulty securing a traditional mortgage. As with any unique investment, however, renters must consider the advantages and disadvantages of rent to own programs before entering into an agreement. Your Troy rent to own home is waiting, call 248 825-3382 today.
Rent to own programs can be a boon to consumers with poor credit or financial struggles seeking to buy a house. Individuals and families who may not be able to secure mortgages from traditional lenders can take advantage of rent to own programs to buy a home and furnish it with the necessities of modern living.
Rent to own home Troy MI programs are structured much the same way as traditional rental agreements, with the catch being that the lessor agrees to transfer title of the house to the lessee at the end of the rental period. Real estate rent to own agreements are structured over a longer period than other rent to own programs, allowing borrowers to make affordable payments. In return for the convenience of rent to own agreements for lessees, lessors charge a higher interest rate than traditional loans, and ultimately charge far more than they would for an up-front transaction.
Rent to own programs are not technically scams, but the end-of-the-day cost of a house under these agreements can be enough to make borrowers think twice. The higher interest rates of rent to own agreements coupled with the length of the rental period can cause borrowers to pay more than double the normal price of the house. Monthly payment amounts are often structured to be quite manageable on a low budget, but the ultimate cost of the transaction dwarfs the cost of paying up front.
Troy rent to own home agreements offer distinct advantages to both lessees and lessors. Lessees in a real estate rent to own program receive the benefit of holding the landlord responsible for normal repairs and contracting, just as in a rental agreement, until the title is transferred. Lessors benefit by the increase in total revenue that these agreements provide. In addition to this, lessors retain the right to repossess property in the case of default, allowing them to keep all previous payments and sell the property under a new rent to own agreement.
Rent to own programs are well suited for certain home-buyers, but these deals are not for everyone. Calculate and consider the total cost of the program as well as the length of time you will be making payments. Ask the lessor to discuss your right to exit the agreement or request changes in the terms of the program in the future. Also, give some serious thought to your ability to save up enough money and build a good enough credit reputation to eventually obtain a mortgage, allowing you to purchase the property outright and reduce the overall cost of the house. Call today for rent to own home MI Troy 248-825-3382!
When the market is saturated with homes for sale, rent-to-own becomes a popular option. It solves several problems for both the buyer and the seller. Rent-to-own is a contract to buy, but the closing date has been extended a year or two into the future. The renter has plenty of time to line up financing, and the seller gets his mortgage payments covered with rent in the interim.
Lease Purchase vs. Lease Option
Many people confuse lease purchase–aka rent-to-own–with lease option. There is a big difference. Lease option gives the renter the option to buy the home. The renter is not agreeing to buy it, but if a contract is offered, he may have first right of refusal. In other words, he should produce financing and close on a loan, or make plans to move out. A lease purchase is a contract to buy with an extended closing date. The time is used to save a down payment or to line up acceptable financing.
The buyer in a rent-to-own situation can freeze the price on the home a year or two in advance of when he must close on the mortgage loan. In the contract, he can list payments that will be contributed toward a down payment or toward the sale price. He can move in and try out the neighborhood–and the school system–prior to buying. The extended closing date gives the buyer plenty of time to clear up credit issues or to save down payment money. In the event he does not get financing, however, any deposits he makes up front may be lost. s