How Does Rent-to-Own Work?
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In a rent-to-own agreement, you lease a home for a set amount of time before buying it. The process can be a way for people with limited savings to buy homes because the agreement builds in opportunities to save for a down payment. And if you have credit challenges, you can buy some time in the home you want before having to qualify for a mortgage.
The idea sounds simple, but there are downsides. Monthly costs are usually higher than in a simple lease. If you don’t — or can’t — buy the house, you could lose your deposit and possibly face legal consequences. And while many rent-to-own homes are legit, scammers are known to post bogus listings, too.
In short: Rent-to-own is a legitimate way to buy a house — but it usually isn’t your only option. If you’re considering this route, here’s how to feel confident before you sign.
Mortgage loans from our partners
on New American Funding
on New American Funding
Mortgage loans from our partners
on New American Funding
on New American Funding