Here are some answers to the most common questions we receive about rent to own.
How many year contract do I have to sign to rent?
Rent to own contracts usually range from 1 - 3 years, but occasionally they are shorter or longer depending on the tenant's situation.
When will the buying process begin?
While you are renting to own, you should meet with a mortgage broker to find out what you would need to do to qualify for a loan. (For instance, improve your credit score, save more for down payment, pay off debt, stay at your job longer, get a salary increase, finish school, sign up for credit repair or credit counseling, etc.) Once the mortgage broker says you are pre-approved, then you start the formal process to get a loan to buy the home.
How much down payment do I need?
Rent to own contracts usually require the tenant-buyer to pay 3-5% of the purchase price before moving in. For a $100,000 home, you would need about $4000. For a $200,000 home, you would need about $8000.
Are there any closing cost?
You would only pay closing costs if your loan is approved and you purchase the house and become the homeowner with the title in your name. The bank providing a loan would work with you to determine those closing costs.
How much monthly payment do I have pay?
Rent to own homes generally range from about $1200 to $2500 per month depending on the size and condition of the home, but occasionally we have homes available for less or for more than those amounts.
Who is responsible if something goes wrong?
During the rent to own process, tenant-buyers usually handle the costs of minor repairs and maintenance as they work to become the owner of the home, and the landlord-seller will continue to handle larger capitol improvement costs -- such as a new furnace or new roof.
What if I don't want to buy by the end of my rental agreement?
Rent to own is also called Lease-Option because you have the option to purchase but you do not have to buy the home! If you decide to move out at the end of the rental agreement, you are free to do so. You will not receive any refund of any monies paid, and you will be responsible for any outstanding charges for rent, late fees, damages, etc. Sometimes people choose rent-to-own to "try out" a neighborhood, and then decide to buy somewhere else when the lease ends.
