Advantages of Rent to Own and Owner Financing!
If you are looking at rent to own and owner finance homes for sale, you may be wondering if this is the right decision for you. Let’s take a look at some of the key advantages of owner financing and houses for rent to own.
Monthly payment is going towards the purchase – Each month, a portion of your payment is credited towards the purchase price of the home. When you rent to own, this is called a rent credit. With owner financing, it works in the same way that a conventional mortgage would.
Less Cash Out of Pocket –Most rent to own and owner financing deals require significantly less cash out of pocket than conventional financing. This is especially true since the mortgage market has tightened up. Rather than having to make a 10% down payment, you can typically get into houses for rent to own for between 2% and 5% of the purchase price of the home.
No Additional Down Payment at Closing – Most of the time, contracts are structured so that you will not have to make any additional down payment when it comes time to get a mortgage of your own. Your option fee and rent credits are frequently enough to cover the down payment requirements. Additionally, most lenders will consider the mortgage a refinance and base the requirements off the appraisal rather than the purchase price. This means that any equity build up in the home will further lessen the amount of cash you will be required to come up with out of pocket.
No waiting on an approval! –Getting a mortgage can be a stressful and lengthy process. Typically, the process takes a month or more. During this time, most people are on pins and needles, wondering if they are going to actually get the loan or not. When you rent to own, you know right away if you are approved.
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