The basic concept is finding a way to "force" savings towards a down payment by including a portion of the monthly rental that goes towards that savings. You pay your rent every month and your Landlord deducts a pre-determined amount to hold in a special bank account, called an "escrow" account. Your Landlord holds that money until you have saved up enough---through this "forced-savings" method---to meet a down payment to purchase the home.
The terms of the purchase price, including the down payment amount, and the amount to be set aside from the rental for down payment, are all set down at the time of lease signing.
It's all about helping the renter/tenant save up enough money for a down payment to buy a home (in this case, the one you're renting). But this is a better deal for the Seller because he gets to lock in a purchase price and a buyer today for a future sale.
Saving money for a down payment? Well, heck, you can do that on your own.
If you are dedicated to the idea of buying your own home, you can create your own savings plan to save up enough money for a down payment. And when you have saved up enough for a down payment, if that takes a year or two or more, YOU get to decide on the price you're willing to pay for the house at that time based on current market conditions. You won't be locked in to a price that may be a lot higher than what the house is worth in the future.
With Rent To Own you'll be locked in both to the house and to the price, even if it takes you 3 years to save enough through the forced savings of the rent payments. What happens if three years from now your life situation has changed? Maybe you need a bigger/smaller home. Maybe your employment has relocated. Maybe your credit or income is insufficient to qualify for a mortgage loan.
Find a way to save up on your own; not with Rent To Own.
Sit down with a local Mortgage Banker and get yourself prequalified, too. You may find you're better qualified than you think you are, and, if you're not, at least you'll know how much loan your income and credit qualify you for, and how much you have to save towards down payment and closing costs.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
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What is the particular reason why you wouldn't want to purchase right now. In this economy rentals are very costly and for the same amount of money, if not less, you can purchase your own home from the beginning. I would suggest to first get prequalified for a loan and see if you are even financially capable of purchasing a home and if so what you can afford. I grew up, live and work strictly in Valley Stream. It's a wonderful community and am glad to be raising my family where I grew up. If you need any addition advice or are interested in seeing either rentals in the area or homes for sale I would be glad to work with you. You can call me @ 516-710-4298 or email me @ RichMarin19@gmail.com, or text me @ 516-967-8470. I wish you the best and look forward to hearing from you.
If you are a serious buyer in this market I would suggest you continue to save and/or improve your credit. Rent to own is just not a first option anymore, at least not in the NY market. Does anyone agree or disagree ???????
I hope this answered your questions.
Wishing you the best of luck,
De Vonte Williamson, LSA
Coldwell Banker Residential
Proudly Serving Long Island
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