Rent to own, is this a good option?

By
Real Estate Agent with Keller Williams Realty

Why would you engage into this type of deal? Well... if your credit is not so hot and needs a bit of work but you are tired of renting and your hard earned money going  no where... then maybe  it's a good idea.

It's not a free lunch and often requires not only an upfront money or deposit from you but a commitment from to repair your credit and follow up with all the requirements so ultimately you can actually own the property in a set amount of time.

It's not as daunting as it sounds but you have to be willing to follow what the investor requires from you so the property is yours at the end.

The Big Question-->  how it works? The General Idea is that the investor will either offer you a property from their portfolio or supply you with a list of properties that they are willing to purchase and rehab for you. Then you enter into an option to purchase the property within 12 months or so, during such time you will have to start the process of reparing your credit and follow up with all the requirements in order for you to purchase the home. The Rent you pay every month will have an option to be partially applied to your deposit or not, that's something negotiable. The initial deposit will be credited to you for the final price of the home. About 60 days before the end of the lease you will have to see how far are you into the process so you can start scheduling the closing. Then at the end of the 12 months (or less) you are the actual owner of the home.

It's very important to follow up with the mortgage broker or credit repair company because they are the ones who will give you the green light to purchase the home. The more you are active during this process and the more involved you are with them, then the faster and the better for you to ultimately be able to get a mortgage.

Not everything is set in stone, most investment groups are flexible depending your circumstances. They will check you up and the group will decide if you are  a good candidate for their program.

Remember always to ask and ask ... then you will have answers

Comments (1)

Randy Shamburger
Movement Mortgage - Greenville, SC
FHA, VA, USDA and Conventional Mortgage Expert

Great points, thanks for sharing.

Have a Big day,

Randy

Jun 11, 2014 02:46 AM