Not everyone is financially ready to buy a home. Even with VA loans and first-time homeowner programs, it can be hard to save for a downpayment and get pre-qualified for a mortgage. In a competitive housing market like Tipp City, many buyers are getting pushed out of bids because they can’t make full-cash offers. Fortunately, you have options when it comes to potentially owning a home of your own. Some people are looking into rent-to-own options to secure desirable properties. Learn more about this option before you search, “rent to own homes near me.”
How Rent-to-Own Homes in Tipp City Work
A rent-to-own home is also called a lease-to-own home. This occurs when a potential buyer agrees to rent the home for a period of time (typically one to five years) before buying it from the homeowner. During this period, the buyer pays rent to bring down the overall cost to buy the house. This makes the purchase more affordable to the buyer, while the homeowner is able to bring in a little rental income along the way. For example, if a home would normally sell for $360,000 then a renter might pay $2,000 per month in rent over five years (60 months). If $1,000 of that goes towards paying for the home, then the renter would have paid $60,000 over five years. This brings the purchase price down to $300,000. It’s up to the homeowner to decide what percentage of the rental income goes toward the purchase of the house. During this five-year period, the buyer will also have time to build up their credit scores and can potentially secure a mortgage because they require less money from the bank. It is also worth noting that during this period the owner of the property will still have the responsibilities associated with making sure the house is safe and livable, this means things like maintenance will be done by the landlord.