Rent to own housing is becoming incredibly popular. If you have been renting your home and would like to own a home some day, you may be wondering what you can do to move towards your goal. With tightening lending guidelines and increased down payments, getting a mortgage today may not be possible. Still, you do have options. You can consider rent to own housing or even look for an owner finance deal.
Before you do that, you should carefully consider if rent to own housing is right for you. Are you serious about owning a home? Are you willing to take care of it as if it were your own? Most rent to own and owner financing contracts put the responsibility of home maintenance on the tenant. Yes, the home owner must still be responsible for major things under most state laws. But, much more responsibility will fall on you than if you just rent. You need to make sure that you are OK with not being able to call someone when you have a leaky toilet!
You need to carefully consider your credit and income situation as well. Are you willing to do what it takes to improve your credit score? Credit restoration takes time and effort. It won’t happen quickly and it isn’t something you can get done in a couple of afternoons. You need to begin right away and continue to work diligently throughout your rental period.
You will also need to make sure that you can verify your income with tax returns and that your debt to income ratio is in line with current lending guidelines. If necessary, you may need to develop multiple streams of income so that you can pay down debt during the rental period.
By making sure that a rent to own home is right for you upfront, you can save yourself the heartache of getting into a home and then ultimately losing your option fee.