Owning a home is one of the basic precepts of The American Dream. For many people though, bad credit or no money down restrict homeownership. Because the real estate market is now tenuous, many sellers are disposed to try a lease-purchase agreement to sell their property. Buyers have the opportunity to appreciate all of the responsibilities entailed on an authentic homeowner before making the plunge into a concrete situation. When the preparatory time is over, their credit and down payment should be adequate to receive a mortgage. Real estate purchase should not be taken lightly, so this method of homeownership allows a trial period for both the buyer and the seller.
If you have poor credit because of bankruptcy, divorce or unpaid medical expenses, moving beyond this point can seem fraught with challenges. A rent-to-own option could help you overcome these roadblocks. This method is gaining in popularity with sellers as well because the rent paid by the buyer can go towards the mortgage on the property. At the same time, they are securing a future buyer for the home. A potential buyer has a place to live, opportunity to repair or build credit and save for a down payment. Also, a buyer can have all of this as well as locking in a price for the house. The only drawback for the buyer is the increased monthly cost over a standard lease.
Another benefit of the lease-purchase contract is that the buyer can ease into the responsibility of owning real estate. The reality of responsibility can set in quickly if the hot water heater breaks or the roof begins to leak. Also, they will have the added expenditures of HOA's, water, trash and sewer bills along with taxes and insurance with which to become acquainted.
When entering into this sort of agreement, it is of great significance to fully understand the terms. Make sure you understand that there may be penalties should be unable to make your monthly payment under the contract. Late payments could result in the termination of the agreement and the forfeiture of monies paid towards a down payment.
Finding opportunities for a rent-to-own situation may be more common in the near future because of the housing crisis.. Buyers should remain cautious of the legal consequences of defaulting on this sort of contract. When both parties win, there is increased possibility for success. Owning property is one of the founding principles of this country, with a lease-purchase option; you can be on your way to financial freedom.
