Profile picture for PeterTumblety

lease purchase rent to own

looking to lease purchase/ rent to own, a Duplex or single family home in the lake worth/ Del ray beach  area of south Florida. My credit is not good but i have down payment money, thought this would be my only option to own a home
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September 30 2013 - Lake Worth
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Answers (1)

Profile picture for wetdawgs
@Peter:

While the theoretical concept of rent with the option  to buy/lease purchase may seem attractive, some of the realities are considerably less so and it can be a great way to lose a large amount of money. 

Owners who will consider rent to own are very rare, so it will cut down your options for properties considerably.   I consider it much smarter to spend a year or two working on improving your credit and (if necessary) saving up a good down payment.   Yeah, it is tough to move but it even tougher to lose a lot of money attempting to buy.

Some features of rent to own:

1.  Down payment required - often substantial (say 10% or 20% or even 30%) and is non-refundable if the potential buyer doesn't purchase.

2.  Monthly rental is above fair market rent, with the only amount going to purchase is the amount above the fair market rent.  This is also not refundable.

3.  If not qualified for financing at the agreed upon  time and price, then you lose everything you've put into the house to date.

4.  The price is agreed upon at the beginning of the contract, and who knows where house prices are going.

5.  You still depend on the owner to pay their mortgage.   If they fail, you lose.

If you do get involved in this, please involve an attorney in the contract.  IMHO, there are spend the time fixing your credit.   Home purchase should not be an emergency.

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September 30 2013
 
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