The best option for people who want to own a house but could not presently get a mortgage because of poor credit standing, is to look for a rent to own house.
To rebuild your credit, accrue monthly rental credits, and save money for your down payment, you will need at least 6 ro 24 months to accomplish.
Rent to own arrangements are beneficial because even while you are still working at your finances, you can already live in the house. Then you can lock the price and build down payment credits.
Having a rent to own tenant is more beneficial to a home seller since this type of tenant will natural care more for the house which could someday be his, than a regular tenant who will just leave when the tenure is finished. The house owner will also receive a non refundable fee down payment from the tenant. When it comes to house maintenance, the new tenant will definitely have an interest in this until the end of the option period.
One of the important things in rent to own arrangements is that your credit score be repaired. Your should try to improve your credit score throughout the option period. A respected lender or credit repair firm is able to assist you In improving your credit standing. A seller should work with the future buyer so that they keep on the track to purchase the home.
It is very important for the rent to own seller and buyer work as a team. They should pay close attention that the property is valued correctly. If you are trying to get financing and the valuation is incorrect, then you might have a difficulty in this. For the seller not to lose the deal if the appraised value is not the same as the agreed price, then he should renegotiate the sale.
You should be making rental payments on time each and every month. At closing time, this will be to your own benefit because your lender will be able to use this on time document payment history.
The seller must be willing to credit the buyer for on time rental payments. With this credits you will be able to build up your additional down payment funds.
Check on the house title to see if it is free and clear. The buyer should ensure this, otherwise the seller would find difficulty in closing if the house has big liens or judgments.
These are the things to be watchful about when entering into a rent to own agreement. This is a great option for both buyer and seller if everything is done accordingly. The seller is able to sell his home and the buyers locks into a price and has time to build his credit.