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How does rent-to-own work?
Many people have heard the term "rent-to-own" and think it sounds great. They think "I just pay rent until
I own the house, Right?" Wrong! Rent-to-own is a great opportunity for people to become homeowners,
but it is not without risk.
Here's how it works:
1) You pay an "option" payment right up front. Typically 3-5% This payment is non-refundable. You will
never get it back. -This money goes toward your purchase of the home and "locks in" an agreed upon
price at which you may buy the house at the end of your lease term.
2) You pay rent for an agreed upon period of time. Some sellers/investors will not allow more than
1 year. Usually a portion of your rent is counted as a "rent credit". That means it is counted toward
the purchase at the end of the lease agreement.
3) You must find a home loan by the end of your lease term and you are now the proud owner of a home!!
Benefits:
1) You are now paying toward something that will be yours in the future instead of giving your landlord money.
2) You have the ability to improve the home and keep the benefits of the improvements.
3) You are very close to obtaining all the perks that homeowners enjoy. (Taxes, equity, etc.)
Risks:
1) The majority of tenants can never obtain a mortgage in the amount of time given. (This is why many i
nvestors will only allow 1 year).
2) When you don't buy, you just walk away with NOTHING! (Remember, your option payment was
NON-REFUNDABLE)
SOLUTION:
We make sure our clients are prepared for a rent-to-own deal before they enter into one by utilizing the services of DelSol Credit Repair. We give you every oppurtunity to be one of the few who actually follow through and buy the home. Even if now is not the right time for you to buy you are still taking all the steps to prepare yourself in the future to be able to buy. There are only so many things a credit repair person can do to help you out. If you are starting out with a 400 FICO score I can tell you already this program will not work for you or us. Also, we structure the deal from the beginning to allow you the time needed to rebuild your credit and buy that home. You will not be set-up to fail with us. |
