Rent-To-Own by ianmc1981

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									Rent to Own

Some potential homeowners who are not able to purchase a home right away
consider rent to own options instead. A rent to own option, often
referred to as a lease, is essentially a rental contract for the rental
of a property which includes the stipulation that the renter will be
given the option of purchasing the property at the conclusion of the
lease. This type of rental agreement may not be worthwhile for all
renters but there are some who will find this type of agreement to suit
their needs quite well. In particular renters with bad credit who might
be unable to buy a home otherwise and renters who aren’t quite sure they
really want to buy a home. It can also be a worthwhile agreement for
homeowners who are planning to sell their home buy may not want to sell
it immediately.

When Your Credit is Bad

Potential homeowners with bad credit may find a rent to own situation may
be just what they are looking for to help them purchase their dream home.
There are a variety of financing options currently available and it is
likely even homeowners with poor credit can find a financing option but
it is not likely this option will be favorable. Homeowners with poor
credit are often shackled with unfavorable loan terms such as higher
interest rates, requirements to pay points and adjustable rate mortgages
instead of fixed rate mortgages. In these situations, it might be
worthwhile for the renter to repair his credit before attempting to
purchase a home.

One of the best ways to repair credit is to maintain good credit in the
present and into the future. Most blemishes on credit reports are erased
after a certain period of time. Renters who have poor credit can work on
repaying their current debts in a timely fashion and with time their
credit score will improve. During this time participating in a rent to
own program allows the renter additional time to repair his credit and
may also allow the renter to accumulate financial resources which will
enable him to purchase the home when the lease period is over.

When You Just Aren’t Ready to Buy a Home

Some renters opt for a rent to own program when they aren’t quite sure
they really want to own a home. In these types of agreements, renters are
given the option of purchasing the home at the end of the agreement
period but they are not obligated to purchase this home. This allows the
renter to see what it is like to own a home without having to commit to
homeownership.

Renters who are renting a home may learn a great deal about homeownership
during the rental period. This may include information about maintaining
the landscaping of the property and dealing with conflicts with
neighbors. It may also entail caring for and maintaining a significantly
larger domicile than most apartment renters have to maintain. Some
renters are not quite sure they are ready to handle all of these issues
and may use a rent to own agreement as a trial period to determine
whether or not homeownership suits them.
When the Homeowner Just Isn’t Ready to Sell

Some homeowners offer a rent to own option when they plan to sell their
home but do not want to do so immediately. Some homeowners may be hoping
for property values to rise before they sell their home so they can
either regain the amount they have invested in the house or profit from
the purchase price of the home. These homeowners might choose to rent out
their home during this time and offer the renter the option of purchasing
the house after a set time period. This enables the seller to earn an
income from rent while they are no longer living in the home. The rent
they charge to the renter is often enough to cover the mortgage and yield
a profit making it a financially wise decision for the seller.

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