In a rent-to-own or a lease option, the seller of the house is giving you an opportunity to buy the house at some point in future, at a price that has been agreed today. For those who are unable to purchase a house, the rent to own option can be a viable option for the ownership of a home. If you determine that you can't afford a mortgage immediately after calculating the amount through a mortgage calculator, you may think of getting a home through the lease option.
Here are some benefits of rent-to-own accommodations.
# 1. The rent money becomes an investment
Usually, it is seen that the rent money that is paid by the borrowers goes into the pockets of the landlord to pay back his mortgage loan on the home. This amount supplements his monthly income and helps the renter in repaying his mortgage. As you pay off the rent as a down payment or in monthly installments, the rent money goes towards purchasing the home and hence it becomes a smart way to invest in a home.
# 2. The purchase can be made for poor credit scorer
If your credit score is poor then, rent to own is the best way to get an accommodation despite being a poor scorer. As the rent payments are going towards the purchase of the home, the payments are made just like the mortgage payments. When you reach a point of making your last payment and purchase the house, your landlord may use the credit at his disposal and transfer the deed to you to justify the sale of the home.
# 3. You can get the new house faster
When it comes to taking out a conventional mortgage loan and purchasing a traditional home, it can take months to complete the procedure involved and move in to the house. However, it may surprise you to know that with rent to own houses,
# 4. You're free from tax
As you're paying the rent to the landlord, the land lord only responsible for paying the property taxes on his home until the entire balance is paid in full and the ownership is then transferred to the tenant. Therefore, the tenants may easily save money until he owns the home.
# 5. Your home equity grows faster
As the appreciation of the house happens faster, the home equity grows faster than on a normal mortgage loan. As the tenants are paying the rent of the house, he may certainly make improvements to the home while he is accommodating within the house. Thus, during the time of the final payment, the house may appreciated in value.
However, before you go for a rent to own home, you must keep certain things in mind. Check the legal documents of the house and always verify whether or not they're authentic. Cross check the terms of the lease and discuss every matter before signing the deal papers. While taking out your mortgage loan, make sure you calculate the mortgage amount through a mortgage calculator and then take out so that you can repay in easy affordable monthly payments.