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Facts about Rent-to-own Properties
Also referred to as lease to own, rent to own homes are a good way for you to own a house when you would not otherwise have a high credit score or sufficient funds for a down payment.
The process of renting to own a home is similar to leasing an automobile. The renters generally pay an established amount of money each month while living in the property. A percentage of the paid monthly rent is put aside and may be used for the home’s down payment. The rest of the rent per month serves as income to the property seller.
After a certain period of time, established at the start of the contract, often within three years, a renter has the option to purchase the house. Agreements are created at the start of the arrangement so that the two parties will understand the terms well.
These terms include the rent per month, the price of the house, and the predetermined period of time during which the renter will make a decision whether or not to buy the property. There are additional fees for rent to own homes. Renters are required to pay a rent premium and an option fee.