Some readers may be familiar with the term rent to buy, others however may not be so familiar. Some companies have built huge businesses with rent to buy concepts, selling furniture, white goods etc. However the buyer normally ends up paying many times what the product is actually worth. While this may be great for those who have bad credit, people would prefer to avoid going down this route. Homes are no exception, especially if you are trying to buy a home with a rent to buy option.
Rent to buy may appear good in the short term but in the longer term it is an expensive way to buy something especially a home. Although you may be making smaller monthly payments than if you had a mortgage, over a long period of time usually after a year this option of buying property does not add up.
Rent to buy property has its disadvantages. Even though it can be great for those with bad credit, you will normally end up paying back a lot more than you would with a mortgage. You will still have to pay back your lender with a mortgage, although that amount won’t be nearly as high as it would if you decided to get a house on a rent to own basis. The ?6,000 you paid in rent is gone whereas in mortgage repayment it will have reduced your debt and increased the stake you have in the home.homebuyers Philidelphia
For those with bad credit who can’t get approved for a mortgage, then rent to own until you can organise credit is an option. You should make sure to seek legal advice before you agree or commit to anything. This way, you’ll know how much you’ll be paying for the home – and for how long.
There are some advantages of the rent to buy model. Rent to buy houses are often put on the market by the owner. This way, you’ll deal with the owner direct, which should give you a competitive price. It will start out as a traditional lease, then move to a rent to buy option after a period of time if you decide you want to keep the home. Some owners are very flexible and will work with you just to move the property off the market, while others will charge you quite a bit more, in order to make a larger profit.