Rent-To-Own

[St. Gabe 0]

My Fiancee and I are looking to buy a house after plunging almost $15,000 into a duplex over the past year and 7 months. I can not find anywhere how a rent-to-own home works. This is our best option right now as we are both on the cusp of graduating and will soon be able to afford higher payments. So, in general, if any of the older, more learned members of the forums can help me understand how rent-to-own works. I'd appreciate it greatly.

 

Thanks guys,

 

Gabe

[theintensifier 0]

I'm not "older", but I thought it'd be nice to help out.

 

Stuff I've found:

 

So what exactly does rent to own or a lease purchase entail? A standard rental lease allows you to live in the home and there are usually associated move-in expenses such as a deposit and/or security deposit. With lease purchase homes or lease option homes, the "option" agreement gives you the right to purchase the rental home within a certain period of time at an agreed upon price. There is also usually an initial "option" amount due upon signing (similar to a rental deposit) and a monthly additionally payment which applies to the purchase price of the lease option home.

 

Buying a lease option home through a rent to own lease is one way to save for a downpayment while you get to enjoy living in the house for lease option purchase. But be sure to fully understand this type of agreement as you must be willing to see the option all the way through and make your payments on time or you could risk losing the right to purchase the home and any additional option amounts you paid.

 

1. You earn equity each month, simply by paying rent.

2. There is no bank qualifying required to get into the home

3. You only need 3-5% down payment.

4. You get to "test-drive" the home and check out the neighborhood before you commit to buying.

 

http://www.jscinvestments.com/faq.asp

[kkktookmybabyaway 0]

I didn't rent to own, but here's some advice/nagging. If you are looking to settle down, wait until you two get steady jobs, take your time and find a house you two both like and then commit. If you're looking for something just for a few years then there's nothing I can tell you. Get ready for a buttload of extra costs. And stay away from Adjustable Rate Mortgages.

[Guest Vitamin X]

Yeah kkk's got a good point. Also, don't assume that because you're graduating soon you'll have more income. Most college grads here will tell you the exact opposite happens most of the time. Not to mention you'll have those lovely student loans to pay off afterwards as well...

[kkktookmybabyaway 0]

In addition, you'll have to deal with property taxes and a number of fees/bills that some people don't deal with when renting. Then there's that leaky roof or busted central air system that you'll notice one day after you spend your paycheck on DVDs.