When you are planning to buy a house but you are not able to meet the lending guidelines, a rent to own option would be a good alternative that will help you in making your dream of owning a home come true. In different ways, rent to own houses are found to be more flexible financing options because the current owner will be the one to carry the financing for a particular period of time. This will be able to allow the buyer in having enough time to prepare for a traditional mortgage financing. In most cases, rent to own contracts will allow the buyer to acquire financing from a typical mortgage lender for one to three years. If you have been in a bankruptcy or foreclosure before or perhaps you lack a down payment, have derogatory credit or that your income cannot be counted by a lender in qualifying for a mortgage, the rent to own options will allow you in overcoming such problems and in buying the home that you want.
There are actually different benefits which you could obtain from rent to own options as a buyer. For the buyers, such options will actually give a specified amount of time which will allow you in repairing your credit, learn the mechanism in re-establishing your credit through on-time rental payments, be able to avoid future price shocks by locking in sales price of the property, be able to save on down payments through monthly rent payments and is also a good way when it comes to knowing the neighborhood and property first before you make your final decision to buy the property.
When you prefer to buy a property through rent to own options, you have to take note that most lenders will need an appraiser in doing a rent comparison schedule. Schedules like these actually helps to give verification on the monthly credit from the seller to the down payment of the buyer which will not exceed on the difference on the current payment amount and the typical rent that’s paid to where the property is located. The lender will in fact allow the excess rent payment to be added for the down payment fund.
The best thing that you should do first before entering on such agreement is to consult with a lending institution first. Through their help, they could then tell you what you would need to do for you to be able to qualify for a mortgage in the future. Just like with other financial agreements or legal documents, it is important that the two parties have an attorney who will review the documents before signing them.