Rent-to-own agreements can help potential homeowners prepare for the day they’ll own a home. Renting a home for an extended period of allows those future owners to save additional money, establish a stronger credit history or overcome any other obstacles that may be standing in the way of obtaining a mortgage. These types of lease-purchase agreements also allow the renters to experience many of the trials and tribulations faced when owning a home, while also becoming familiar with the property they are interested in owning.

If you’ve considered a lease-purchase agreement but aren’t sure if it will benefit you, a recent article on the Equifax Finance Blog, “Is Buying a Home Using a Rent-to-Own Agreement a Good Idea?,” will help you make a more educated decision.

re renting by prohibiting the owner from selling it for a specified period of time, usually one to three years. The price is locked in up front no matter what changes occur in the housing market, so you have an extended period of time to work toward being able to afford that home.

The terms of the agreement should include who will be responsible for home repairs, bill payments, HOA fees, landscape maintenance and more. It’s typical for the renter to be responsible for covering much of the home maintenance and repairs, as well as other costs, up to a certain dollar amount, which will give you an understanding of the responsibilities you incur while owning a home.

Also common when you’re renting to own is paying a higher-than-average rent for the property. For example, if you’re paying $1,500 per month, while the standard rent would usually be $1,200, that additional $300 paid each month is added toward the purchase price of the home. If you rent for two years prior to buying, you’ll have put $7,200 toward the purchase price of the home already. However, it’s important to understand that it’s typical for the renters to be out that additional paid rent if they choose not to purchase the home.

To learn more about lease-purchase agreement, or to find the top questions you should answer prior to entering this type of agreement, read the full article on the Equifax Finance Blog.

Leave a Reply

Your email address will not be published. Required fields are marked *