subject: Rent To Buy Is The Easy Way To Own [print this page] Buying a home in the current economy is simply out of the question for many would be home owners. The job market has failed, the housing bubble has burst and mortgages are back to the old standard of at least 10 percent down and in most cases, the number is closer to 20 percent.
For most people hoping to purchase even a modest home this means coughing up 25 percent deposit or more depending on the mortgage providers. That leaves most people with just one option, which is rent, until now. It is quite possible that you could rent to buy a home with very little money down and reasonable payments.
Renting to own your property has several benefits over a traditional mortgage, not the least of which is the ability to purchase even if your credit is not perfect. Most of these agreements are very similar to a rental agreement where you agree to pay a fixed sum every month however at the end of this agreement you will either own or have the option to purchase your home for a stated price.
Variety of Options:
There are several rent to buy options available for first time home buyers and others. You can browse through a variety of options before choosing the plan that best suits you. For example, one popular plan offers you a home at a reasonable monthly rate for a period of one year, at the end of the year all the rent you have paid is attributed to the purchase price of the home as a down payment. In most cases this will fulfil the 5% required for most home mortgages. There are other variations on this plan including a step down program where you receive 100% of the rent you have paid if you buy in 6 months, 75 percent after 12 months and so on up to two years and 25 percent.
Affordability:
The best thing about these rent to own plans is the affordability. As a rule, the interest rates or fees paid each month will be much smaller with a rental program than a standard mortgage. In most cases you will find these deals advertised but if you find a home you would really love to purchase there is no reason why you cannot draw up your own rent to own contract and submit it to the sellers, if a home has been on the market for an extended period of time they just might jump at the chance to see some revenue.
Conclusion:
Over the next few years housing prices are expected to rise, some analysts are suggesting a 20 percent increase over the next three years and at least a 5 percent jump by the end of 2010. Now is the time to get in on shared ownership options, so if you have less than perfect credit and only a small down payment rent to buy homes may be your best option. Why settle for less when you could begin the process of home ownership today?
by: Lawrence White
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