Also known as a lease-to-own house, a rent-to-own house is popular to people who want to buy a house but do not have enough money for a down payment. This mortgage option is also beneficial to sellers who are having troubles looking for potential buyers who have a good credit background. To avoid experiencing problems, buyers and sellers should be clear about the terms of payment. Learn more about this option by knowing its advantages and disadvantages.
The Advantages of Houses for Rent to Own
One of the advantages of rent-to-own homes is that buyers can improve their credit history while saving money for a house. Another advantage is that they can leave the house if they find serious troubles. If this happens, they will not have the chance to get back the option fee that homeowners usually ask from renters before they moved in.
On the side of sellers, they can find this mortgage option beneficial if home values are declining. This is because they can assign a higher price for a house before they engage in an agreement with potential buyers. In addition, if buyers back out before the term ends, sellers get the buyers’ option premiums. Moreover, they can use the rental fees of potential buyers to get a new house.
The Disadvantages of Houses for Rent to Own
One of the disadvantages of getting a house for rent to own is that buyers are responsible for repairing house damages. Unlike if they are just renting a house, the owner of the mortgage maintains the unit that they are occupying. In addition, most contracts state that when a payment is delayed, the owner of the house gets the rent credit for that particular month. On the other hand, if ever a new buyer comes and is willing to purchase it for a higher price, sellers cannot grab such opportunity because they have a contract with renters.
How to Find Houses for Rent to Own
One of the easiest ways of searching houses for rent to own is by looking at the classified advertisement section of newspapers. Aside from these, buyers can search the Internet and look for available mortgages in their place. If they are having problems finding such units, then they can ask their banks because sometimes they offer lease-to-own houses to their clients.
More Points of Houses for Rent to Own
A lease-to-own house mortgage option offers opportunities to people who do not have ample money or savings for a down payment to get a new house. This option is also advantageous to homeowners who are having a hard time finding potential buyers for their old house. In addition, this option is beneficial to those who want to improve their credit rating.
If you are interested in engaging in such option, it is important to weigh the advantages and disadvantages of rent-to-own houses. Additionally, potential buyers should be sure that they sign a contract with sellers before they occupy a house to avoid having serious problems in the future.