Rent to Own or OWC Homes-A New Path to Ownership
Most of us are very familiar with the term “rent to own”. Places such as Prime Time and Rent A Center have built an empire with rent to own merchandise, although the buyer normally ends up paying more than the merchandise is actually worth. While this may be great for those who have bad credit, most of us prefer to avoid going this route. Homes are no exception, especially if you are buying a home on a rent to own basis.
Even though rent to own may be good for a short period of time, it proves to be an expensive way for someone to buy something they intend to keep. Rent to own merchandise for example, may sound quite compelling at a few dollars a week. The agreement is normally for around 15 – 20 months, which is where the company makes their money. Although you may be paying just a few dollars a week, the total amount quickly adds up to nearly twice the cost of the item.
Along with paying rent, you’ll also have to pay applicable sales tax as well. Like merchandise, rent to own real estate has it’s disadvantages. Even though it can be great for those with not so great credit, you’ll normally end up paying back more than you would with a mortgage. You’ll still have to pay back your lender with a mortgage, although that amount won’t be nearly as high as it would if you decided to get a house on a rent to own basis.
In most cases, rent to own houses are put up on the market by the owner. This way, you’ll deal directly with the owner. It will start out as a traditional lease, then proceed to a rent to own basis if you decide you want to keep the home. You and the owner will then work out an arrangement, which will normally be quite a few years. Some owners are very flexible and will work with you just to get the price they want for their home, while others will charge you quite a bit more, in order to make a hefty profit.
Some home owners also offer owner will carry homes. This means that the home will be yours with a traditional down payment and the home owner will take the direct payment. The payment made directly to the home owner will help you to be able to make a mortgage payment and to buy a house with bad credit. When you do buy a home with bad credit you pay more, you may have to fix some things in the house but you’ll get the house that you want. Make sure when you do an owner will carry home or a rent to own home that you have the typical home inspections and that you file all the appropriate paperwork with your local courthouse in order to ensure that you have the rights you need over your own home. For example, rent to own homes in Florida are becoming very popular, but some are also owner will carry homes which require just a down payment. In both cases, you are getting something that you need, which will be a good service for you. If you tried to get an auto loan with bad credit, you’d have some problems and the same holds true for real estate. Getting a rent to own home may be the best way to buy your new house and then refinance when your credit improves.
If you have bad credit and can’t get approved for a mortgage, then rent to own would be your best option. Although some don’t like to do it due to the price, for many it’s a better alternative than an apartment. With rent to own houses you are paying money towards the home, instead of just paying rent. In some cases this is fine, although you should make sure to double check with the owner before you agree or commit to anything. This way, you’ll know how much you’ll be paying for the home – and for how long.