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If you are thinking about moving into a home under a rent to own program there are a few important things you should consider first.
1. One of the most common complaints I come across in a rent to own situation is from tenants who have lost all of the money they were planning to use as a down payment. Many rent to own tenants go into a contract in good faith, but often never end up purchasing the house they are renting. If a renter needs to back out of the agreement the landlord then has the right to keep the down payment premiums.
2. House Values: The price of the house is agreed upon at the time the lease is signed, if house prices drop then you are locked in to purchase the house at a higher price. Many times in the case of a private sale banks will ask for an appraisal, if the house comes in valued below the purchase price the bank will not finance up to that amount. I have seen this happen on many occasions and if the sellers refuse to lower the price and the tenant backs out of the deal, they looses their money.
One of the most common reason people think they have to do a rent to own is because they have no down payment. Many people are not aware that it is still possible to purchase a home with absolutely no money down. This year alone, I have qualified over 40 people for a mortgage when they thought they wouldn’t be able to purchase. Try to talk to a mortgage broker before you rent to own and see if you can qualify. At least if you do they can tell you exactly how long it will take to qualify, or whether you can do it sooner than you expected.
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