People who have bad credit and do not have enough savings have difficulty securing a house financing through bank mortgage; thus, it makes it quite impossible for them to purchase their dream home. However, this is only the thing of the past because now it is made possible by rent-to-own deals. Practically anybody, even those who are newly graduates and those who have average or bad credit standing can now avoid the common pitfalls of renting a house for life. What do I mean with this statement? I will try to explain the effects of having to rent as opposed to the many benefits of a rent-to-own homes program.
Today, there exist new concepts like “rent to own houses”. Yes, you can just pay the rent and after a while, when the term for the rent is over, you have the option to purchase the property by paying a nominal purchase fee or nothing at all. It all depends on the agreement between the owner and you. It is also known as a lease to purchase option.
This concept is not very new in the market, but it has gained much popularity since the economic crash and the credit crunch. The lease is something like a normal rental agreement and the tenant agrees to pay the monthly rent as long as the rental term exists and then the tenant can exercise the power to buy the house. The rent paid is usually deducted from the purchase amount of the house. When the renter is considering the rent to own houses option, the rent is a little higher than usual but works as a way to create a housing deposit with the landlord in case of eventual purchase.
Rent to own homes give opportunities to people with a poor credit history to be able to buy a house. This is because the tenant or the potential buyer need not make a hefty down payment in order to buy the house; he may just have to rent the house for a fixed period and then he will have the option to buy the house. This way he may have enough time to collect some money to purchase the house.