How Does Rent To Own Work With Bad Credit ?
So, what do you do? Your credit rating is poor or non-existent. You see money going out each month on rent with this stretching out into the future. You would love to be a Homeowner with pride of ownership, investing in your future. One day you happen to come across a program that just may possibly change your life. It is a Rent to Own avenue that was designed to help those with a poor credit rating, no credit rating, or those who having been unable to save that all important down payment. How does rent to own work with bad credit.
First of all, what exactly is rent to Own?
- A Rent to Own Home Program is a way for people with bad credit or no money saved for a down payment to become home owners.
- A way to build your credit rating.
- A way to start building your equity through using the rent you are paying towards your mortgage down payment.
- The prospective renter/future homeowner signs a contract with the end option to purchase the property within a specific time period.
- Do you understand the difference between a lease option and a lease purchase?
Who is right for this Program?
How Does Rent To Own Work With Bad Credit
Time to carefully examine the program and decide your options
- Those who want to improve their credit rating and work towards qualifying for a regular mortgage.
- People who are willing to continue renting with a portion of the rent going towards a down payment to become a homeowner.
- Someone who has not been able to obtain a mortgage for a home purchase.
- Those who understand the pros and cons of a Rent to own program.
What are disadvantages of Rent to own program
Time to check and recheck
- Must have own payment saved by end of contract period
- Deposits are lost if the renter doesn’t fulfill all contract obligations.
- In the case of an increase in Housing values it is the homeowner and not the rent to owner buyer who has a right to the real estate gains.
- In the case of a decrease in housing prices the rent to own buyer will pay the locked in price and not the lower priced value.
Who is responsible for upkeep and taxes – the homeowner or the rent to own buyer
What are the advantages of Rent to own programs?
- The renter can decide before signing a contract if they like the house and the neighbourhood
- The Rent to own program is a good way to establish a credit rating or improve a poor rating.
- The potential buyer has time to set aside savings for a down payment.
Decision Making Time
Now that you have read the pros and cons you are in a better position to make an informed choice. How does rent to own work with bad credit. Take the time to carefully investigate if this program is right for YOU. It is important to understand that while this program isn’t right for everyone, it can be an excellent option for those who wouldn’t otherwise be able to own their own home.