Thursday, July 28, 2011

Lease To Own Program

What is a lease to own program? This is all so know as rent to own. This is a way for people with poor credit such as a bankruptcy or low credit score to purchase a home. This is an agreement that the buyer will rent the home with an option to purchase. The buyer pays rent and a additional premium that is also credited to the purchase price. If the buyer fails to purchase the home they lose both the optional fee and the rent premium. There is generally a specified time in which the buyer must purchase the property usually within three years or less.

An advantage to the buyer who can't qualify for a home loan of any sort is this will give them time to repair their credit and gain some equity in the house.

If you are thinking about purchasing a home through a rent to own program you should probably have a real estate attorney look at the agreement. To make sure that it is structured in a way so that both parties benefit. Buyer should be cautious that the contract is not structured so all the benefits flow to one party and not the other. So remember it is important to read and know what you are entering into when participating in a rent to own program.

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