- What is "Rent To Own"?
- When can I move into the house?
- When I move in will I own the home?
- Do I need an Attorney?
- What if I decide not to purchase in the future?
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Rent-To-Own is when you move in and rent the property that you enter into an agreement to purchase at a later date. You will make normal rent payments while living there. During the time of your tenancy you are expected to work on saving for your down payment &/or building up your credit so that you are able to buy in the future. When you are ready to graduate from being a tenant/buyer to a Full Owner, many Rent-To-Own agreements will give you back some of the rent you've been paying while you were a tenant buyer. The money you receive back can in some cases cover all of your legal fees, closing costs and and decrease your purchase price.
This works very much like a normal rental. As soon as the paperwork, (application, credit check & lease agreement) is completed you can move in.
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As the tenant/buyer you are the only one who can buy the home but you don't become the full owner until you meet the terms of sale in your Rent-to-Own agreement. Each agreement may be a bit different. That depends on whether you are doing a Lease-Option, a Bank Financed closing or an Owner Financed closing.
If you are uncomfortable with lease paperwork you should have your attorney review yours before signing. During your closing process, in a year or two, you should also have a title company or an attorney represent you for the mortgage, title and filing of your ownership documentation.
Participation in a Rent-To-Own program does not place you under a legal obligation to buy. However, if you are not serious about buying from the beginning, then you should not mislead the owner. Always be open and honest. In the event something happens and you choose not the go ahead with your purchase, in most cases, you only forfeit your up front deposit as well as the rent credits you would have received at closing.
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