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Answers (4)
- tgrab
- Contributions:6
If I were "renting to own", I would definitely not put down more than a typical security deposit.... Otherwise, you might as well purchase through land contract (with a clear deed) with a balloon in 2-5 years.
- Angel Dean, "TalktoAngel"
- Contributions:11
Let's use a 2 year "rent to own" aka "lease purchase".......in this scenario, the terms of the purchase are typically determined up front and include a 2 year lease period between now and the projected closing date. This is sometimes a good solution for a buyer who has poor credit - as it gives them 2 years to work towards getting it credit cleaned up to be able to qualify for a mortgage. The buyer would typically put down a chunk of money in the beginning that may or may not be applied to the purchase at the time of closing (2 years out). It is also a possibility that a portion of the rent amount can be applied toward the purchase price of the home, reducing the total amount of the mortgage at the end of the two years.
This type of purchase can be structured in many different ways. It is definitley best to get an attorney involved to draft the contract and help determine the details.
- Krishna Perkins, "sahomelocator.com"
- Contributions:25
It all depends on how the lawyer writes up the contract. The best option is for the lawyer to act as an escrow agent to dispurse all funds to lienholders as you pay your monthly payment. That way the seller is not in a position to not make the payment.
- Naima Sumner, "Dallas Ft. Worth PRO"
- Contributions:2849
Every seller is different, some don't care what the credit score is like, as long as you have a hefty down payment to put down.
In TX lease option contract must be written by lawyers because too many people (buyers) have been taken advantage of by sellers. You can put down a large down payment and the owner ends up not paying the mortgage and you end up with a foreclosed house and out the money you put down etc.
Naima
how does rent to own work? do you need credit?
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