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does anyone know anything about rent to buy options when buying a house???
I think its something like you rent for a year and that money comes off the deposit?? :confused:
any info would be apprepriated
The ones I have had exposure to are renting for 5 years at a very high, over the market, somewhat unsustainable rate (around $500 a week for a very basic home). This money does not come off the deposit, and gives you no equity in the property.
You are committed to buying the property at a price now, despite what the market fluctuation will be in 5 years time.
There are legal issues in relation to ownership of the property, as technically you are not a tenant, but you are not the owner either. And the fees are hideous.
Stay away would be my best advice.
In the words of Elmer Fudd, be very very careful.
ultimately, the deal is designed to benefit the seller/lender rather than the buyer/renter.
They increase the interest rate % quite substantially and if you can't maintain the agreement you won't be seeing any of the money you've given them so far.
I find it predatory, preying on people who are already in a difficult financial position and who just want to get ahead.
:iagree: steer clear of such schemes!
i think those who condemn the rent 2 buy system are not fully informed of the ins and outs of how it all works.
our Friends run a rent 2 buy program and has helped families who would have no other means of owning their own home, own one!
my husband just did the finance for a couple who were on a rent 2 buy for a house that was agreed to be sold for $220K.......24mths later when their savings history improved and they were in a position to get finance, they took up the option to purchase the property at the predetermined price for $220K even though their house is now technically worth $300K. They also got their deposit back (well the deposit was taken off the purcahse price)
I will send you the link to our friends website which talks a little more about it
obviously as with anything, there are those who don't run it properly and are out to rip people off and essentially ruins the reputation for all the good ones out there also.
if you aren't in a position to obtain finance due to bankruptcy/poor credit history/defaults etc...then this is one option for you to look at if owning your own home is important to you.
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