Do you have sick and tired of renting. No doubt you have heard of "the perfect solution" - rent to own. But is it really as perfect as everyone says - hardly. They are the most overlooked aspects of a rent to own deal. So let us find out the truth about lease to own homes.
How Rent to Own Works
The seller will also expect you to put some sort of upfront down payment or option fee. This is normally 1 to 7 percent of the agreed upon purchase price. This extra amount put puts the purchase price of the house.
As of January, 2017 the median rent for a 3 bedroom, 2 bath house in Salt Lake City is $ 1,500. Now the additional amount that you So you will pay $ 1,500 a for you to pay 20 to 50% above the market rent. For the sake of argument, let & # 39; s go with 25% which is about average. If you paid a 3, you may have a rent credit in the amount of $ 13,500. Median home values in Salt Lake City are $ 280,000. If you paid a 3 % option fee of $ 8,400 and combined that with the rent credit, you would end up with a down payment of $ 21,900 or 7.8%. Not bad.
The Truth about Rent to Own Homes
That you the to have the dirty little secret few buyers in your position realize? It is decided that you are unable or unwilling to buy the house at the end of the lease agreement, you forfeit ALL of the money you have paid. Rent Premium and the option fee. Gone. All of it. The seller keeps all the money and you.
Money lost. Or buyer may run into some problems with the seller fails to pay the mortgage and the property gets foreclosed on. Yikes! Money lost.
Start working with a lender in order to qualify for a mortgage and for goodness sake, make sure you absolutely love the house.
However, a calculated decision of renting to own a house has it own benefits as well.
