Rent To Own Houses Are The Rage – Should You Consider Rent To Own Houses?
Rent to own houses are the rage presently especially with the banks cracking down and knocking backs a lot of applications. The reason for applications being rejected varies but the common ones are not a big enough deposit and not a perfect credit file. Rent to own houses offers cash-strapped home buyers an opportunity where they can get into their own home with a low deposit and at the same time it gives them an opportunity for their credit file to be fixed before they are required to get a traditional bank loan.
As it is an area that most people don’t know much about there are a few things you need to know about. Firstly, you need to remember to look at this as a stepping stone opportunity to own your own home. What I mean here is when you buy a house the normal way you have 100’s of options on what house to buy. As such you can keep looking until you find the perfect house. Unfortunately, it isn’t the same when you are looking at rent to own houses. The reason is there are very few houses you can own for as little as $10,000 deposit. This means you need to look at this first step as an opportunity to get into home ownership and later down the track you can you this house to springboard you into your perfect house. So remember, don’t expect to get everything you want when looking at rent to own houses. You will need to make compromises now in order to get into home ownership.
Every person that is selling rent to own houses does things differently. Just because you have spoken to one person about how they set up their rent to own homes and what is required from you don’t expect every other person to be the same. You need to find out how much money do you need upfront (deposit), how long is it for, what will the price per week be, what is the application process.
Rent to own houses go extremely quickly. How many people do you know that currently can’t get a bank loan? Lots right. How many houses are available on a rent to own opportunity? Not many. When you go to look at a house you will need to be prepared to put down a holding fee straight away if you want to secure the chance to own your own home. This is because a lot of people want the chance so you will need to make decisions quickly. To help your application it is wise to take a $1000 holding fee with you to put down while you fill out the application.
One component that varies is how rates, insurance and water are paid. Some people will include this price in the weekly price. Other people will have a weekly price then have another price that covers the insurance, rates and water. Most people prefer to pay these fees weekly rather than having a lump sum payments due quarter.
One of the main reasons rent to own houses work is it gives you an opportunity to show the banks you pay on time. It is important that you pay your weekly payment on time every time. This is because when you go to get a loan from the bank, you can show the history of making the payments on time every time. This will work in your favor as when you buy a rent to own home the weekly payment is higher than traditional rent, it is normally calculated at the weekly price you will be paying when you get the bank loan from the bank at the end of the rent to own period.
Part of your weekly payment will be credited towards your deposit when you get the home loan from the bank. How it works is every week part of your payment goes towards owning your own home. For example, if $250 per week goes towards you owning your own home, over a 3 year period that would be $9000 towards your home. If you paid $10,000 upfront then that means the seller will say you have paid $19,000 towards the deposit.
So the next step is for you to find out if you can get your own rent to own home.
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