RENT-TO-oWN
Also called a lease-option, the process works similarly to a car lease: Renters pay a certain amount each month to live in the house, and at the end of a set period -- generally within three years -- they have the option to buy the house. Each month a portion of rent goes toward a down payment to eventually buy the home.
wHO ITS FOR?
A rent-to-own agreement can be an excellent option for people who want – but are not financially ready – to become homeowners. A rent-to-own agreement gives them the chance to get their finances in order (by improving their credit score and saving money for a down payment, for example) while “locking in” and living in the house they’d like to own. A percentage of the rent goes toward the purchase price, and helps to start building equity in the home.