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Has anyone done a rent-to-own deal for their house? How does it work?

Just wondering because we're looking at a home that's rent-to-own next week. It seems like rent-to-own would be a great option for us because we probably couldn't qualify for a home loan on our own, but I just wanted to hear from other people's experiences.

 
GothyMama

Asked by GothyMama at 6:12 PM on Feb. 13, 2009 in Money & Work

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This question is closed.
Answers (5)
  • Well the way a lease option usually works is you and the seller agree upon a price and you pay a slightly higher rent than usual and that portion of the rent will be saved for the down payment. So for example instead of renting for $1000, you would rent for $1100 a month and the 100 a month would go towards a down payment. You would continue renting until the down-payment is fufilled and then you would transfer the deed into your name and pay the mortgage payments. you would still be wasting some money renting...but it's a little better doing it this way than just flat out renting. this is a good option for people with bad credit who can't get approved for a loan. just make sure when you agree to something it is all in writing and their is a realtor or 3rd party involved.
    chrissy12507

    Answer by chrissy12507 at 11:36 AM on Feb. 16, 2009

  • Well, it's very simple. You agree to rent a home for a set amount of time at a set amount of money per month or year. You are then required (sometimes) to come up with a small one lump sum. And after that point of time is over the house is signed over to you...

    BUT... if you move or break the lease they OWN the house and you have NOTHING...
    SabrinaMBowen

    Answer by SabrinaMBowen at 6:56 PM on Feb. 13, 2009

  • . A bank will not do this if the house is going into foreclosure or is foreclosed, but some desperate sellers will do it. You have to be careful though, if they take your money and foreclose anyway you wont know until the bank literally throws you out in the lawn. My uncle and a co-worker both did this and both lost all their money and ended up on the street. My uncle in 1982, a coworker in 1990, I would guess these days the chances of that happening are even greater. Get it in writing and make sure the lease contract is legal allowing you a major portion of your rent alloted to your housing down payments. Chances are very good today, you will get screwed.

    Anonymous

    Answer by Anonymous at 7:00 PM on Feb. 13, 2009

  • Funny that you should ask this now.....One of my neighbors was doing a rent to own deal on their house because they couldn't qualify for a mortgage. She just found out the house was being foreclosed on because even though she has been making her payments, the "owners" haven't been paying the mortgage. She is getting completely screwed because the house is technically the "owners" and she has no legal right to it. She had even put a hefty down payment on it and she is getting kicked out and can't do anything about it. So, I'm trying to tell you that the only way that you are safe doing something like this is if the person outright owns the house, if there is a mortgage on it, this can happen to you to.
    slw123

    Answer by slw123 at 7:30 PM on Feb. 13, 2009

  • we were going to do this and found out from a neighbor next to the house we were going to rent that the guy was a huge swindler! he always manages to make sure that at the end of the two year rental period something goes wrong so he can get the house back without having to return the down payment and in one case actually foreclosed on the person, because he did a owner-will-carry. i am so glad we found out before we went ahead with it. know i am just trying to be patient and wait till we can afford to buy on our own.

    teamama4ever

    Answer by teamama4ever at 11:47 PM on Feb. 13, 2009

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