Should You Lease to Own a Home?

Posted by: Allie P. | Dec 18,2007

This week we’ve already discussed the benefits of leasing to own a home. Renting to own a home lets you pay rent on a home with an agreement to buy the home in the future. It allows you to get some equity in the home before you buy, avoid paying some fees involved with a traditional mortgage and work on improving your credit score while you wait to finance the home. But there are some downsides to leasing to own a home:

 

If you rent to own a home, but you end up not buying, you lose your option to own the home and you may lose a down payment that you’ve already paid (if applicable).

 

If you have poor credit, you still may not qualify for financing when the option to buy the house comes due. You have to continue to work on improving your credit score while you are renting to own the home. Remember, just because you have a lease to own agreement, it’s no guarantee that you will be able to buy the home.

 

If housing prices plummet, as they have in many areas over the last year, you may have agreed on a sale price that is too high for the market value. For example, if your lease to own agreement states that you will buy a home for $300,000, and due to a housing slump homes in the neighborhood start selling for way less, well, you’ll be overpaying for your home.

 

If you’ve found the home of your dreams already, stop by LowerMyBills.com to compare and apply for a home loan online.

 

 

Sponsored Resources Ads by Google