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4 Bumps

Rent to own, I'm so confused

Hubby and I have finally decided that we HATE living in our current apartment. Two of the three neighbors we have are assholes. The ones across the hall from us are prolific pot smokers that management refuses to do anything about. The one below us slam their front door so hard that MY nick-knacks fall off the shelves.

Our credit is good enough for any kind of loan though.

We've been looking into Rent-to-Own/Lease Option homes, but I'm SO confused by the information. We're working with Renttoown.org (listings) and Lexington Law Firm (improve credit), but I STILL don't really understand how we're going to get a house. Seems like all the houses in our area are in auction.

Can anyone help clear my confusion?

Answer Question
 
Rosehawk

Asked by Rosehawk at 3:33 PM on May. 23, 2013 in Home & Garden

Level 40 (116,047 Credits)
Answers (4)
  • I suppose it will take a while for those houses to get a new owner after its in the auction process. The bank owns it until someone wants to buy it from the bank and then they can do whatever they want with it - live in it or rent it out.

    have you considered renting from a private owner?
    americansugar80

    Answer by americansugar80 at 4:06 PM on May. 23, 2013

  • I'm considering everything, as long as it gets me out of this apartment.
    Rosehawk

    Comment by Rosehawk (original poster) at 6:14 PM on May. 23, 2013

  • 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.
    DivaNCali

    Answer by DivaNCali at 8:21 PM on May. 23, 2013

  • Beware there are many rent-to-own scam sites. The best way is to go through a realtor. You might consider renting a house/townhouse or looking for a small house you can afford.
    hellokittykat

    Answer by hellokittykat at 11:20 PM on May. 23, 2013

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