Why would someone want to enter into a rent-to-own agreement instead of buying a home through conventional means? Are there any situations where this option actually makes sense?
Yes! Someone might opt to rent-to-own for any of the following reasons:
Lower down payment. Instead of the typical 20% down payment required in the direct purchase of a home, the rent-to-own option usually only requires a 2% down payment. With the rising cost of today's homes, 2% is more likely to be within a potential buyer's reach than 20%. On a $100,000 home, for example, it's the difference between $2,000 and $20,000.
Bad credit OK. A bad credit rating can prevent someone from obtaining a home loan. At the very least, it will result in unfavorable interest rates that cause monthly mortgage payments to skyrocket. A rent-to-own arrangement is designed in such a way as to allow the tenant/buyer to repair their credit while making monthly payments that enable them to qualify for a home loan by the end of the lease period.
Bankruptcy OK. A bankruptcy is one of the worst things to have on your credit report. A person who has gone through a recent bankruptcy will find it nearly impossible for several years to obtain a loan of any kind for anything, much less a home. Depending on the circumstances, however, there may be sellers willing to offer a rent-to-own agreement to someone who has gone through bankruptcy.
Having trouble selling a home. In a down real estate market, a property may sit on the market for an extended period of time without any movement. A seller in this situation might choose to use the rent-to-own option to generate some income from their property until the market picks up again.
If you fall into any of these categories, you may to consider the rent-to-own option. It just might make perfect sense for you!
Mark E. Moebius
CEO of MILJONAIR Development
3451 St. Albans Road
St. Albans MO 63073
636-300-9000
http://miljonairdev.com
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Thank you for sharing your knowledge with us. We hope this will help other's in making decission, to buy there dream home at affordable price rent to own in cavite is one excellent choice to be consider.
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