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Do You Know What You Need to about Rent to Own Homes?

By Edited Jun 7, 2016 0 0

Deciding to rent to own a home is a big decision and just like all big decisions, it is important that have a good understanding of what you are doing. If you are considering getting into a rent to own contract, then you will want to take this quiz. Hopefully, when you are done you will have a good understanding of the benefits of renting to own and ways that you can ensure your success.

Qualifying for a rent to own homes is:

  1. Easier than qualifying for a mortgage
  2. Harder than qualifying for a rental home
  3. Easier than qualifying for a rental home
  4. Both A and C

The correct answer is D. Most rent to own homes have either no credit qualifying or very limited credit qualifying. This makes sense because the reason that most people enter into a rent to own agreement is because they are having trouble qualifying for conventional financing.

As far as the paperwork and hassle, I should expect:

  1. About as much documentation as a mortgage
  2. No paperwork!
  3. Very little paperwork and a hassle free experience
  4. More hassle than a mortgage – after all, my credit is bad

The correct answer is C. There should be very little hassle when renting to own a home. In fact, the ability to avoid dealing with banks and have limited or no credit qualifying is the reason that many people choose to rent to own a hom

My down payment or option fee should be:

  1. 10% of the price of the home
  2. Equal to one month's rent
  3. 2%-5% of the homes value+
  4. There shouldn't be any down payment

The correct answer is C. Every contract is different, but you should expect to pay somewhere between 2 and 5 percent of the purchase price of the home.

The term of my contract should be:

  1. At lease 24 months
  2. 12 months
  3. Whatever the home owner will go for
  4. Five years

The correct answer is A. One of the reasons that many rent to own contracts fail to end in the purchase of the home is that many people don't allow enough time to improve their home and qualify for a mortgage. For this reason, you want to ensure that your contract gives you at least two years to buy the home. You can always exercise your option before the contract is over!

What kind of improvements can I make to a rent to own home?

  1. Simple things like painting
  2. Anything I want to do!
  3. Since I don't own the home, I can't make any improvements
  4. Anything I want, as long as it improves the home!

The correct answer is D. Every contract is different, but for the most part, all rent to own contracts allow you to improve the home as if it were your own. There is usually a clause that states that the improvements have to be in good taste and not lower the value of the home. In other words, painting the home is fine, but hot pink paint is probably out!

By now you should have a good understanding of how the rent to own process works and be able to determine if it is the right decision for your family!

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