Lease toOwn???

Discussion in 'General Home Improvement Discussion' started by Rockrz, Aug 19, 2008.

  1. Aug 19, 2008 #1

    Rockrz

    Rockrz

    Rockrz

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    Has anyone seen the "Lease to Own" commercials on TV, lately?

    Just curious how that works legally since I would want to have the assurance that I would not be booted out of a home that I'm "Leasing" until I eaither buy it, or decide to move elsewhere which would be no penalty on me.
     
  2. Aug 19, 2008 #2

    Charlie

    Charlie

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    I have not seen the commercials, but generally anytime you lease to own, you are at a disadvantage.

    From a Do-it-yourself standpoint, it often means that even though you are renting the house, you will be responsible for anything that breaks and from a monetary standpoint, it is rarely in your favor.

    You could instead find a home to rent for much less and save the difference in a money market account and then have enough for a sizable down payment by the time you finish your lease.
     
  3. Mar 24, 2013 #3

    Rockrz

    Rockrz

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    Unfortunately, money market accounts don't pay hardly anything anymore with interest rates being so low.
     
  4. Apr 3, 2013 #4

    joecaption

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    Charlie could not be more wrong.
    If your really interested in buying the home but just do not have the money for a desent down payment, and are unsure if home ownership is for you want better way then getting to live in the home to see if it fits your needs, you like the area and see what it needs to fit your needs then to live in it?
    I've never once seen a home cost more to rent to own then to just rent.
    Just rent it and flush all your money down the toilet, or build up the money to buy it your choise.
    Money market? No way is a money market right now going to give you enough interest to equal what rent to own will give you.
    I've also never once seen where the owner held the leaseholder responable for any repairs or up keep.
    Until one of my renters owns the house no way do I want them doing any work on it without out my signed approval.
     
  5. Apr 4, 2013 #5

    nealtw

    nealtw

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    Most people that are not happy with their rent to own deal, never read the contract. Not all contracts are equal.
     
  6. Apr 4, 2013 #6

    dthornton

    dthornton

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    I agree with both joe and Neal. I have never rented to own, but it is common in the south. READ your contract; what you sign is USUALLY legally binding. The big advantage is that for someone who either has no down payment or not good credit, it allows you to get into a home. NORMALLY what happens is you sign a contract agreeing to pay "X" $$ per month. In say, 12 months, you can elect to buy the house with some or all of what you've paid constituting a down payment. That means if you go to the bank for a mortgage and the sale price of the house was $100,000, by the end of the year you may have $6000 toward down payment (if $500 per month counted toward that). It varies, so read the contract BEFORE you sign. In another scenario, you rent for a year and if you decide to buy, the owner carries the mortgage with all or part of the payments over that year counting as down payment. On the other side of the coin, if you live there for a year (or the contract term) and then decide that you DON'T want to buy it, you walk away owing nothing (you just paid rent for that time period). With a legal contract (check with a lawyer first) even if the owner died, his beneficiaries would have to honor the initial terms of the contract. Either way, you stand to win. Just be sure that it is in the contract that the owner (seller) is responsible for all maintenance (water heater, A/C, heat, fridge, etc) until the time comes in the contract for you to either "buy" or "decline".
     
  7. Apr 4, 2013 #7

    bud16415

    bud16415

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    Around here they do a lot of what they call land contracts. The owner sells the property nothing down or a little down and carries the loan. Most are set up for say 5 years and then the buyer has to pay off in full. The idea being by then they should be able to get a bank loan. If they can’t the property reverts back and he then starts over again with a new buyer. I know guys have sold the same house a few times this way.
     

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