If you are one of those people who are still trying to decide if you want the responsibility of owning your own home, the rent to own option may be a solution for you. You do have to sign a contract, but it is one that you can walk away from if you decide that home ownership is not for you. If you do decide that you like the idea of home ownership, then you can finish the contract out and become the owner of a new home. Depending on the purchase price, some contracts on rent to own homes may go to the end of the purchase price while others may cover a certain amount of the purchase price. At thea end of the contract, the buyer may have to get a mortgage for the balance of the loan.
In the rent to own contract the seller will act as a lender to the buyer with both parties agreeing on the purchase price of the house. The buyer will make a small down payment and then make payments each month. A part of the payments made each month will go towards the purchase price.
Using this option is a good way to get a house immediately if you do not have good credit and not able to get a mortgage. When the buyer and the seller agree on the purchase price, that price is locked in when the contract is signed. The buyer is making payments and building up their credit score so at one point they can get a mortgage to purchase the house.
This is the type of option that people chose to use when credit is tight. It is also a way for investors to buy several houses without getting a loan. Some sellers are not aware of this option so if you find a home that you like, you can suggest this option to the seller. If their home has been on the market for a few months, the seller may opt to go along with a rent to own contract to get their home off the market.
When a buyer wants to rent to own a home, they can try to bargain a better purchase price. They can also try to get a lower down payment and monthly rent. Once you sign the contract, the buyer is obligated to take care of the house and property as if it was their own home. If you are looking for a home the rent to own option may be the logical choice.