Rent to Own a Condo

Rent to own a condo or home has received a lot of press lately due to the downturn in the real estate market the last couple of years but is still a very viable option for many home or condo buyers.  There are two main reasons why the rent to own program is attractive to many buyers in today's economy.

Lack of a down payment is common today with the credit markets shrinking and the ability to obtain credit getting harder by the day.  Home lenders no longer have the financial products available to write loans they way they did just a few short years ago.  Cash strapped first time home buyers with good credit are finding it much too difficult to find loan products with little or no down payment.  The rent to own a condo or home programs offered by many different real estate companies and other organizations fills the gap between the inability to buy now and waiting for possibly years before a down payment can be saved.  Rent to own programs can be structured several different ways offering condo or home buyers a variety of options to purchase sooner than later.  One of the most popular today is for a portion of the rent to go toward closing costs or down payment.  This makes it easier for the potential buyer to save the much needed down payment because it is already a part of their monthly payment.  The excess in rent goes toward an escrow account that is not tapped until the buyer is ready to purchase.  In other words, a forced savings account where the buyer or seller do not have access to the money until an agreement to purchase is executed.

The second reason rent to own a condo or home is attractive to many first time home buyers is to create or repair their credit.  When you first go out into the working world you may not have established enough credit for a financial institution to lend your money for a mortgage.  Paying your rent on time in a rent to own program can help you establish the credit needed to purchase since many lenders see the correlation between paying rent and paying a mortgage.  Paying the rent on time not only helps on establishing initial credit scores but also goes a long way in repairing your credit if you have had some challenges in the past.  The rent to own programs today are usually for twelve or more months, so not only are you saving money but have the time needed for credit repair.  Many agencies are available for credit repair but be careful and do your research before signing any agreements.  Your dream of owning your own home is on the line!