Rent to own houses are viable options for people who want to own a home but could not, for the moment, obtain mortgage because of poor credit standing.
With a rent to own arrangement you would have enough time to improve your credit score, accumulate credits for monthly rentals, and save money for the down payment for the house.
The benefit of the rent to own arrangement to the buyer is that you can already live in that house until your finances are well in order. With this arrangement the price of the house will be locked and you can start building your down payment credits.
To the seller, this arrangement is also beneficial because the tenant living in their home will definitely take care of the house more than the typical renter. The tenant will also have to pay him a non-refundable down payment. The new tenant in the rent to own arrangement will should be interested in maintaining the house well for his own sake.
It is a very important component of the rent to own buying process that your credit be repaired. Having a good credit should be on one of the main concerns that you should be working on. It is best to work with a respected lender or credit repair firm to help you rebuild your credit standing. The seller, on the other hand, works with the future buyer to ensure that they remain on track to purchase their home.
It is better to work with your rent to own seller like a team. They both need to make sure that they have the correct value of the property. If you are trying to get financing and the valuation is incorrect, then you might have a difficulty in this. If the house does not appraise for the agreed upon sales price, the seller needs to step up and renegotiate or risk losing the deal altogether.
You duty is to ensure that your rental payments are paid on time. If you are paying on time, the lender will be able to use you on time documented payment history to benefit you at closing time.
On time rental payments should be credited by the seller to your credit. This will help asset you to build additional down payment funds.
Check on the house title to see if it is free and clear. You should look into this because the seller could have difficulties closing if they have a big lien or judgment attached to the home.
These considerations are very important to ensure so that you will have a rent to own agreement without any problems. This is a great option for both buyer and seller if everything is done accordingly. The home is sold and the buyer is able to buy it with the locked price and has time to build his credit.