Home Buying in New Orleans>Question Details

Yvonne, Renter in New Orleans, LA

I rencently read through a few websites that offer rent to own homes. Is that a common or legit method of purchasing a home these days?

Asked by Yvonne, New Orleans, LA Mon Dec 3, 2012

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4
Katherine Racine’s answer
Yvonne, before you enter into a rent to own scenario you must do your research. Check the court records to see who owns the property and whether or not foreclosure proceedings have begun. Make sure property taxes are up to date. A legitimate seller should have no qualms about using an escrow agent to process payments. This third party would collect your rent then pay the owners mortgage as well as taxes and insurance. Unfortunately there are some unscrupulous people out there who will try to sell what they don't own or who will pocket the rent and allow the bank to reposess the property. Without the proper set up, you run the risk of being evicted due to the original owners failure to pay their note.
1 vote Thank Flag Link Tue Dec 4, 2012
Rent to Own generally works in the favor of the Seller.
1) They will cahrge a higher interest rate than a bank
2) In Louisiana, a saavy Seller will structure the loan so if you dont pay the mortgage one month you are on the streets in the next.
3) Unless you have alot of cash and a sure ability to get permananent financing within a specific period of time don't expect to get any special "deals"

Do as the others say and work with a legitimate licensed entity like a bank or mortgage company.
0 votes Thank Flag Link Tue Dec 4, 2012
Rent to own home deals match unsophisticated buyers with savvy Sellers who take advantage of them and laugh all the way to the bank. Do your'self a favor and don't even consider such a deal. Save your money, improve your credit (if it's an issue) and buy a home. Do not Rent to Own unless you absolutely have no other options available.
0 votes Thank Flag Link Tue Dec 4, 2012
Yvonne, it's not very common, but it's certainly legitimate. The home owner typically sets the terms for the lease purchase and the rate is usually higher than you would pay if you were to get your own financing. Have you spoken to a lender to see if you qualify for a mortgage? Having your own financing opens up a much larger pool of homes to you instead of the limited inventory that will do a rent to own.
0 votes Thank Flag Link Tue Dec 4, 2012
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