Lease to Own: Is it the Right Deal for You?

Posted by: Allie P. | Dec 17,2007

When you’re starting out, and trying to figure out how much house you can afford to buy, leasing to own might sound like a good option. When you rent to own a home with a lease purchase agreement, you rent a home but you also have an option to buy the home in the future. A lease option also lets you buy the home at a future date, but you aren’t required to buy. There are a lot of benefits to leasing to own your own home. Is it the right deal for you?

 

If you rent to own a home you may not have to come up with as much of a down payment when you buy. Oftentimes the lease to own deal is financed by the homeowner, who can offer you good terms and a small down payment. You may also be able to forego closing costs and other fees involved with getting a traditional mortgage when you lease to own.

 

Even if you have poor credit, you can often still rent to own a home. Or, you can work on improving your credit score before you buy the home, while you are still renting.

 

Your rent goes towards the home purchase when you lease to own a home. So by the time you buy the house, you have some equity already and you may be able to get a lower down payment. In addition, housing prices, especially in metro areas, will continue to go up but you’ll have a locked-in sale price when you rent to own.

 

There are also some downsides to leasing to own a home. We’ll get to those tomorrow. In the meantime, if you’ve already decided to buy a home, check out LowerMyBills.com to compare rates from lenders and apply for a home loan online.

 

 

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