Some people are probably confused about what the meaning of rent to own is. Rent to own is defined as the owner who has promised to sell the property to the tenant for a certain price within a certain time frame. Based on The Balance website, rent to own is defined as a way to purchase or sell something over time, giving the buyer a choice to buy at some point in the future. Talk about rent to own, you may want to know whether there is rent to own property that can be found through Zillow. Of course, you are able to find rent to own home through Zillow. You need to know the work of rent to own.
When you rent a home and then finally you want to live there forever which means that you want to buy the home. Actually, it is a good thing if you have less than stellar credit and need time to build up good credit history while you are renting. Rent to own is a condition when a tenant signs a rental agreement or lease that has a choice to purchase the house or condo later generally within three years. The monthly payment of the renter will include rent payments and additional payments that will go towards a down payment for buying the home.
The contract of the lease will state the rental payment of the tenant, how much of the rental payments accrue toward a down payment and also how much the purchase price of the home will be. You have to know that before you sign a rent to own lease from your seller, you need to get pre-approved for a mortgage at the purchase price stated in the contract or lease to guarantee that you are able to afford the home. If are not able, renting-to-own cannot be the right choice since the contract could inflate the rental price slightly to account for the contribution of the rent payment that is accruing toward your down payment.
To rent to own contract or lease, you should always have an attorney look. It is because there is no industry standard template for writing rent to own contracts or rent to own leases. You have to be clear on who is holding the down payment funds, and also specific state regulations and tax considerations. One of the benefits of rent to own choices is that your housing plans are in place all at once. It works if you do not want or need to move. However, if you do not want or need to move, rent to own will limit you to that single property purchase choice and therefore it might not be worth it.
Rent to own can also be a good choice for people who might have recent credit trouble that they need a few years to repair. The credit score of yours plays a big factor in the mortgage rate that you will get which is able to make a big difference in your monthly payments. Then, your credit score will also help determine whether you are eligible for a mortgage.