Owning a home is a privilege not many can afford. There are a lot of schemes out there which can help individuals looking to fulfill their dreams of owning a home. Rent to own is one such scheme. It is growing in popularity these days.
What is rent to own?
Rent to own is an agreement between the owner of a house and an individual looking to buy the house. This scheme is usually taken by people who have a bruised credit history or a bad one. It gives them time to regroup their finances and own the home of their dreams at a later date while already living in it. The owner agrees to rent out the property to the individual who pays the rent along with a little extra amount which is considered to be a contribution towards the down payment of the home. Rent to own provides individuals with an option which could culminate in them owning a home.
Why should you go for a rent to own plan?
- Bad credit is not an issue: Since a rent to own plan is essentially for people with bad credit, it does not provide a great obstacle. The person looking to buy the home, can work on their financial situation while they live in the home. This plan helps them to develop their score by making timely payments on their rent and also building savings during the renting period.
- Fix a good rate: With rates changing as quickly as the weather, it is better to lock down a rate on your dream home when it is lower. Rent to own plans allow you to lock down a particular rate on the home. If the rate increases, you still have to pay only what you decided. If the rate falls, you can opt out of the option with ease.
- Check out the neighborhood: Nobody wants to get their excitement of moving into their own home to be dampened by noisy, unruly neighbors. Rent to own gives you the chance to look at your neighborhood and decide if you are comfortable with the amenities and the ambience. It is a trial period where you can assess whether or not the place really suits you.
- Inspect the house: Before buying anything, we obviously have the need to check if that product is in good condition. Rent to own provides you a chance to understand the home and see what the problems are. You can also see if the home will be children friendly or if it is ill-equipped or any other deal breaker that you might encounter. You decide at the end of your plan if you want to buy.
- Easy down payment: With a rent to own plan, you will be paying the owner of the house a certain amount every month other than your rent. This amount, at the end of your lease, will become the down payment for your home. You can get a mortgage for the remaining amount.