If you want to buy a house now, but have something holding you back (credit score, job, down payment etc.), a rent to own situation might be the solution for you! Rent to own doesn’t always get the best rap, but when set up correctly, it can provide you with tremendous benefits! In our latest post, we will provide you with 6 reasons why you should rent to own your home!
Many people think that if they want to buy a house, they will first have to save up a small fortune and make sure their credit looks perfect. While these things are both beneficial for future homeowners, there is a way you can find, secure and lock down the house you want today, even if you aren’t quite ready on paper. Below we offer many reasons why a rent to own agreement can benefit you when purchasing your house!
#1 – Time To Save Up
When you agree to purchase via a rent to own contract, you’ll have the time to save up as much as possible. You’ll know exactly when the purchase will become official, giving you lots of time to prepare. You will be living in the house already, it will feel like home, and you won’t feel like you are simply throwing your money away on rent each month.
#2 – A Chance To “Try Before You Buy”
Imagine being able to live in the house for two years before committing to buy it? When you rent to own, that opportunity can present itself! What if something goes wrong with the house? You’ll want to make sure there isn’t a penalty for changing your mind about purchasing. If needed, include disclosures to protect yourself in case of discovered damage or other circumstances. We like to think of it as similar to leasing a car. You can make sure it has all the whistles and bells you want – if not – don’t do the buy portion at the end of the lease and move onto the next.
#3 – You’ll Have Time To Fix Your Credit
Rebuilding your credit can feel intimidating, but with a plan of attack, a lot can be accomplished in a couple of years. With a little work and some proper budgeting, you’ll be able to raise your credit score, allowing you to qualify for a loan. You might be surprised at how quickly your credit score will jump with just a few small changes.
#4 – Lock In Today’s Price
When you sign an agreement with a seller the purchase price will usually be agreed to upfront. This means that no matter what happens with the market, the previously agreed upon price is what goes. While home values can always drop, it’s more than likely the house will be worth more in a couple of years, ultimately letting you purchase below market value.
#5 – Build Equity While You Rent
While your rent may be higher in a rent to own agreement, contracts are typically set up so that a portion of your rent will go toward the down payment on the home when it is time to buy outright. Keep in mind that if you default on the agreement, the owner may be entitled to keep all of the rent paid in addition to the deposit and option fees. Entering into a rent to own agreement should only be done if you are 100% positive you will be able to hold up your end of the deal.
#6 – Confidence Boost
Owning a home can do wonders for your self-confidence. Maybe it has been a goal of yours for a while but has always felt a bit out of reach. With a rent to own agreement, you’ll be able to reach your goals faster than you think! You’ll be able to take pride knowing you are well on your way to owning a home of your own.