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HOW RENT TO OWN (R2O) WORKS Rent to own is a great program for folks who would like to become homeowners. With this program you get to rent a house for a year or two and then buy it. Within this year or two the future buyer gets to work on the credit score, income history or any other details that needs to be taken care of for the successful loan application. The sales price gets fixed before you start renting. This allows you to build equity throughout the rent period.
Example
Sales Price: $60,999.00 You move in today and rent the house for a year or two knowing that at the end of the rent period you'd be able to buy this house for the sales price you lock in on the move-in date ($60,999.00). Before you move in, a deposit of $3,000.00 is required. This deposit will be applied as a credit towards the sales price, when you're ready to buy. When you are renting the house, your rent is $600 a month. With each rent payment you receive a $120.00 credit towards the purchase price. This means that if you're ready to purchase in a year, you will have accumulated $120.00 x 12=$1,440.00 of credit and hence the purchase price will be reduced by this amount.
So if in a year, you're ready to purchase, the amount you'd need to finance will be $60,999.00 less the deposit amount less the total accumulated credit: |
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Interested in Rent to Own? |
