Rent to Own Homes in Egg Harbor City
Buying vs. Rent to Own Homes
When you rent to own, you pay an option fee and rent the home for up to three years while prepping for financing approval. Then, you buy it as soon as you’re ready. When you buy a home normally, you skip to the third step of the process.
Basically, when you’re almost ready to own a home, you should consider renting to own, but when you are ready, you should go ahead and purchase it.
Rent to own gives you more time to improve your credit score or save up a greater down payment in preparation for buying a house. Ultimately, rent to own is more expensive than outright buying a property because you’re paying rent to the owner every month. However, lease-options are a much better alternative than renting a property because you’re building some equity in the home, just not as much as you will once you purchase.
Once you own a home, you will likely be making monthly payments to a mortgage. Mortgage payments are typically around the same amount as rent to own payments, but all of it – minus interest, PMI and taxes – builds equity in the property, which directly benefits you.
Rent to Own Realtors
Realtors have more experience with closings and real estate contracts than the typical buyer or seller, but not many of them want to work with rent to own deals. A commission from the sale of a home is much larger than the commission a realtor will receive from rent for the first few years of a lease-option deal.
Instead, visit title companies to make sure the property is eligible for rent to own, consult with a lawyer to ensure that the contract benefits you and meet with a mortgage broker to find out when the buyer will be ready to close on the home.
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These programs are a great way to buy a condo or townhouse if you have bad credit. In fact, lease purchase and rent to buy programs usually offer cheap homes with no credit check. Just make sure you look at your lease to purchase agreement to understand whether you have the option or obligation to buy the home you’re looking at. Lease-purchase agreements require the buyer to purchase by the end of the lease term, while lease-option agreements give the buyer the option to buy.