Although owning a house is one of the most powerful ways to increasing your wealth and stability, many people are unable to obtain the necessary financing or make the full commitment based on varying circumstances. This is why considering a rent-to-own program may be right for you.
These programs will typically offer a lower initial down payment and monthly rent credits which will be applied to the purchase price, freedom to make minor repairs or updates to the current property, and the ability to help improve credit while investing in the home that you would have an option to buy at the end of the term.
Some options a buyer would have to acquire the necessary funds for a down payment would be through the use of savings, borrowing from a family member, income tax refunds, or investment plans. Another benefit to the program is that you are not obligate to buy at the end of the term. This offers you flexibility and peace of mind if circumstances were to change for any reason.
So, should you consider it?
Before deciding on whether or not to do a lease option, it is very important to consider the potential risks that you may face as well. In order to offer you full transparency, let's look at the problems that are involved for buyers in a lease option agreement.
Unfortunately, there are people who will decide to move forward with a contract on a home with reasonable terms under the assumption that they will be able to qualify within the 1-3 year period to which the agreement has been set. However, just like fad diets or New Year’s commitments, if you do not change your actions and habits, you will be exactly where you started when the time comes to make your decision to buy.
The downside to this is if you decide to make the down payment and apply credits towards a home that you are unable to buy at the end of the term, you would end up losing that hard earned money. Therefore, we do not recommend for buyers to jump in on a deal until they are fully confident that they have a set plan to improve their credit and save the money necessary to refinance and make the purchase.
The seller is not responsible for assessing your own personal situation. This is something you need to do your homework on and make sure that you are fully comfortable with the terms and the likelihood of being able to buy when the time comes for you to make your decision.
Feel free to contact me to discuss the issue further or get together with a lender to discuss your options.
No comments:
Post a Comment