Rent to own homes provide a great choice for buyers who have problem credit or difficulty qualifying for a home mortgage. In essence, rent to own homes allow many homebuyers to achieve the dream of home ownership, even if they cannot afford something as fundamental as a down payment.
However, before entering into a lease to own agreement, those considering lease option homes should become familiar with what they can expect after signing the contract. The following is a look at some important information that prospective buyers should know about rent to own homes.
Rent-To-Own Homes Make Moving In Easy
One of the reasons for the popularity of rent to own homes is the ease with which homebuyers move into them. Rent to own homes allow renters move into homes without any dealing with banks or the mortgage companies. Little paperwork is required, which also makes it faster for homebuyers to move into the home of choice. Finally, many lease option agreements may not require a credit check or come with minimal credit requirements, making it easy to complete the contract and move right into the home of their dreams.
Home Sweet Home
Rent to own homes allow homebuyers to quickly make the property feel like home, which is quite different from a situation where an individual only rents the residence. In most traditional rental situations, the tenant normally needs to get any changes or improvements approved by the landlord before taking care of them. This is not the case with lease option homes, which is another reason they are so beneficial.
Most of the rent to own homes contracts allow the prospective buyer to make changes to the home and property, which includes renovating, painting and even landscaping it the way that is desired. This allows homebuyers to make the property feel like their own home. However, homebuyers must remember that money they spend on repairs or changes to the property will not be given back to them if they decide not to purchase the home at the lend of the lease period.
Credit Repair is Essential
Some homebuyers who enter into rent to own homes contracts will never end up purchasing the homes by the end of their contract. Those with credit problems need to take measures to improve their credit during the lease period if they want to qualify for financing for the home. Individuals can work on improving their credit on their own or they may want to use the services of a credit specialist. Failing to repair credit during the lease period may mean that homebuyers are still unable to make the final purchase in the end, which means they have spent money on the lease option fee, rent and improvements in vain.
Researching the Price is Key
Homebuyers must be aware that the prices on rent to own homes are often higher than homes sold traditionally. However, homebuyers still need to spend some time researching the price the seller is asking to ensure it is a reasonable price. This research includes checking out comparable homes in the area to see what they have been selling for, which helps homebuyers decide if the asking price is really a good deal.
Having the home assessed for value can help as well, since it gives prospective buyers an idea of what the home is currently worth before negotiating a purchase price. While paying a bit more for the benefits of lease option homes is to be expected, homebuyers should avoid overpaying too much on a home that may not increase in value over time.
Locking in a good price now can be beneficial to homebuyers, so doing a bit of research is important to ensure the seller is not charging an unreasonable price for the home being considered.
At a Glance:
- Rent to own homes are favorable to people with bad credit scores;
- Rent to own homes are relatively easy to move into;
- The contracts of most rent to own homes are structured in such a way that the renter can actually start to improve the inside and the outside of the home as if it were already owned by him or her;
- Chances for eventually buying the home can be increased by repairing credit;
- Eventual buyers should ensure that the purchase price corresponds to the real value of the home.