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What does rent to own mean?
Structured correctly, rent to own houses enable buyers to invest in their homes by turning lease payments into equity ownership.
Is rent to own a new concept?
The concept is not new. Buyers and sellers have been structuring rent to own transactions for decades. However, recent changes to lending standards have made it challenging for many aspiring homeowners to secure a traditional loan, and rent to own has become a popular alternative.
What are the components of a rent to own agreement?
There are two major components of a rent to own agreement: 1) a lease that includes the monthly payment, term, rent credit and other customary provisions, and 2) the purchase option, which grants the tenant-buyer the option to purchase the home at an agreed upon price at any point prior to the expiration of the lease.
What type of potential buyers choose the rent to own method?
Potential buyers have historically included the following: (a) Renters who want to improve their financial profile (i.e. save more money and restore any credit problems) over the course of a lease in order to obtain an affordable mortgage at the end of the lease (b) Renters who are presently unable to qualify for suitable mortgage rates due to credit issues (c) Families who want to try out a home, neighborhood, or school district before committing to it long-term (d) Renters who are tired of renting and want to take positive steps towards home ownership (e) Real estate investors.
Who pays the real estate taxes and homeowner insurance on the rent to own?
Taxes and homeowner insurance are typically paid by the seller of a rent to own until the tenant-buyer completes the purchase.
Besides a rent to own agreement, what else is important?
Be sure you have a FICO score that will support mortgage qualification by the time the rent to own period ends. Fortunately, since most rent to own agreements run about 3 years on average, there is time available for those needing to repair their FICO score. By registering for our service, you will also have access to obtaining your credit scores and credit repair or consultation services.
Why are there foreclosures in the listings?
Foreclosed and other financially distressed real estate can offer homes well below market prices, saving thousands of dollars. These homes are often more affordable for investors to make available as rent to own.
Where do you get your foreclosed property information?
Our sources include government agencies, lenders, title companies, lenders, asset management firms, auction companies, and more. Numerous sources contract with us to obtain property listings, which we make available to our registered users to have one of the most comprehensive property search tools on the Web.
What is the difference between rent to own, lease option, lease purchase, rent to buy, owner financing, and land contract?
Lease option transactions are also known as rent to own, or rent to buy transactions. In a lease option, the landlord-seller leases the home to the tenant-buyer and the tenant-buyer has the option to purchase the home for a pre-determined price at any point prior to the end of the lease. The main components of a lease option transaction are the lease term, the purchase price, the down payment, and the rent credit. Lease purchase transactions are similar to lease options; however, rather than granting the tenant-buyer the option to purchase the home, lease purchases contractually obligate the tenant-buyer to purchase the home.Owner financing agreements and land contracts have similar payment schedules to that of lease options and lease purchases; however, these agreements enable the buyer to purchase the home and obtain title at the beginning of the transaction. The seller, instead of receiving a large cash payment at the time of purchase, as he/she would in a conventional sale, serves as a lender for the remainder of the agreement, and collects monthly financing payments from the buyer. When the owner financing agreement or land contract expires, the buyer obtains third-party mortgage financing and fully repays the seller loan.
Where are you located?
Our business address is LeadQual LLC
RTO Info Co.
2001 Addison Street, Suite 300
Berkeley, CA 94704.
How do I contact Customer Support?
Our Customer Support Department is available to assist you Monday–Friday, 4 AM–8 PM PT and Saturday–Sunday, 7 AM–3:30 PM PT. We can be reached by email or by phone. Our toll-free phone number is (800) 987-7880.
