Usually with rent-to-own, you'll pay an option fee, and the rent would be higher than normal with the amount over going towards the down payment. At the end of the option period, if you decide to buy, your option fee + the amount of rent you paid would be considered your down payment. Then you would get a loan from a bank to finance the rest for, usually a 30-year mortgage.
Example: House is being sold for $100,000.00. You give a $5,000.00 option fee. You agree to rent for 12 months. Normal rent would be $500.00 per month. Your rent to own rent is $800.00 per month. $300.00 of that $800.00, is credited to you as going towards the down payment. At the end of 1-year, you've put $3,600.00 (extra rent) + 5,000.00 (option fee) = $8,600.00, to be your down payment for the house. You'd need to get a bank loan for $91,400.00 to finance the rest over 30-years. You'd also money for need closing costs. Hope this helps.
at 8:47 PM on May. 23, 2013