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Why No One Talks About Homes Anymore

Important Things To Know About Rent To Own Homes

So, you have reach your boiling point and don’t want to rent anymore. What seems to be the problem is that, your financial records fail to meet the requirements to get a mortgage approval or you are lacking of necessary documents. If you would consider the rent to own option, this will not be much of a problem anymore. But prior to proceeding with such option, you need to know that there are factors that you ought to know which may affect your decision.

So rent to own works like a typical rental property. You will rent a house but rather than just renting it, it has the option of buying it at the same time. The lease option would fall on the seller’s term but most of the time, this lasts for 3 years more or less and you are expected as well to put an option fee or upfront down payment. This is normally 1 to 7 percent of the purchase price you and the seller has agreed for the house. Aside from the rent, you’ll be paying what’s called Rent Credit or Rent Premium. This additional amount is what put towards the final purchase price of the property.

So let us say for example that the average rate for a house with 2 baths and 3 bedrooms is around 1,500 dollars. In relation to the added amount that must be paid for the purchase price of the house, this is something that you and the owner has to talk to. In most cases, you will be paying 20 to 50 percent of the above market rent but let’s go with 25 percent as the median for the sake of this article.

Now back to the drawing board, the rental fee for the house is 1500 dollars, get the 25 percent of that and that is what you have to pay for the purchase price. If your lease is set to 36 months, you will be paying an accumulated rent credit of $13500, which is how each rent to own structure works.

But as soon as you have taken the path of rent to own property, do the best that you can in completing the lease term. The reason for this is that, if you can’t pay the house or unwilling to proceed with the deal before your lease ends, you would forfeit everything that you’ve spent on the house including the rent premium and the option fee. The seller keeps all and you don’t have any other choice but to move out.

You will be shook on how many times these sorts of things have happened. To avoid these things happening to you, plan how you will proceed with rent to own option.

Researched here: read the article