No Huge Down Payment
When you purchase a house traditionally, you have to have at least 20 percent upfront as a down payment. But with rent to own programs you only need 2 to 3 percent of the agreed-upon price upfront.
Then, as you pay each month you will be adding to this amount that is taken off the purchase price. By the time you are ready to buy, you’ll have a sizeable sum already paid as a down payment, without the need for additional funds off the top.
Easier Qualification
You may be running into problems getting a traditional mortgage such as employment stability, recent self-employment, debt to income ratio, or credit score. However, for a rent to own program you often only need moderate credit, provable income, and a good rental history. You will need to overcome those other obstacles by the end of the lease agreement, but two to three years is plenty of time to fix these problems.
Fast Move-In
When you buy a home in the traditional way it can take up to 90 days from the time you put in the offer until the day you close on the house and can move in. With rent to own programs, you can move in right away, since closing doesn’t occur until you get the mortgage at the end of the lease agreement. Then, when you close on the house in two or three years, there’s no moving to be done. You’re already home.
If you have been running into problems with buying a home but you are tired of your rent getting you nowhere, rent to own programs could be your dream come true. Carefully examine the conditions of any agreement to protect yourself. Otherwise, enjoy this growing trend.
Susan McCullah is an established writer who has created dozens of informative articles about credit scoring, identity theft, budgeting, taxes, debt, and finance. She has worked in the Credit Reporting industry for 15+ years and is FCRA certified. Susan regularly conducts in-person presentations and webinars on the topics of credit scoring formulation, raising credit scores, and identity theft.
