RENT TO OWN HOMES

In the beginning of the home buying process, if you can’t come up with a down payment, traditional financing is likely not an option. This is why some people choose rent to own contracts instead. Those who have everything they need to get into a classic mortgage will likely do so, as it is a more concrete option. Coming up with rent to own terms for the contract on your new home can be the most complicated part of the process. Remember to ensure that what is negotiated works for both parties.

Understand the differences between rent to own vs buying traditionally before you take the next step. What are the major differences, when do the transactions differ, and why would you want to choose either option? 

When making a home purchase traditionally, you make a down payment, finance the cost of the home, put out funds up-front for closing costs, and start paying toward the interest and principal balance right away. With rent to own contracts, you pay option money (generally much less than a down payment), rent the home you plan to purchase in the future, and invest monthly rent credit to ensure that you can purchase the home when you are ready or at the end of the contract.