If you are a renter who is tired of paying someone else’s mortgage, want to own your own home but there are a few small things standing in your way Rent to Own (RTO) may be an option for you. Rent to Own is a means of acquiring ownership over time without taking on debt at the moment.
Similar to a rent to own for a TV, you can rent to own a piece of real estate. The renter agrees to lease the home from the seller for a pre-determined time usually from two to three years with an up-front deposit. The up-front deposit that you make initially is much less than a deposit you will need to make with bank financing and you do not pay the property taxes or the mortgage, since you are still a renter during the term of the contract. The seller allows the buyer to lock in a monthly price for the term of the lease along with non-refundable option payments each month going towards your future down payment. This is a way to live in your home now even if you are not in the position to make an immediate purchase. A lease purchase can make your rent money work for you while living in your dream home.
One of the benefits of doing this is that you get into your home with the intention of buying the house at a later date with a locked in future price. In today’s market, with rising house prices entering into a rent to own agreement could be saving you a lot of money in the long run.
This resourceful type of agreement is becoming more and more popular because it works well for those who are new to the housing market or have made a job transition. It is also a win-win for anyone who needs to strengthen his/her credit or pay off an obligation help them qualify for a home purchase. The best part about this type of agreement is that, with a rent to own home, you get to live in the home you want to buy while you work on fixing or building your credit.
