There are rent to own opportunities, depending on what is available at the time you are looking and what area you are looking at. When you set up a rent to own, there are some real intricate details that need to be set up and have to be drawn up by a lawyer.
As you may already know, this type of transaction is usually of interest to those who have issues with their credit. Can you give me more information on why exactly you feel that this would be a better set-up for you?
Often times, I have been able to direct folks to lenders who have been able to assist with low credit scores or low incomes who have been helped. I can assist with this opportunity once you give me some more information on what exactly you are looking for, what your budget is, and the area you are looking at, for starters.
There are ways to do a lease-to-own, but the are extremely complicated (often with a real estate attorney!), involve a lot of money up front that you would loose if you did not close on the specific date you agreed to plus other factors. Also, many scams are out there regarding vacant properties and the Internet regarding the sending of "cashiers checks" in advance of seeing the home or meeting the other parties involved.
Others simply lease a home and if they like it, might present an offer to the landlord.
If your looking for angles to get around bad credit scores, getting money back from the owner/seller to assist with your closing cost or other issues, speak to a seasoned Realtor and we can help you with all of these possible issues that might be holding you back from purchasing now.
Bernstein Realty, Inc.
These are outstanding opportunities ... for the property owner! All the risk is on the tenant/buyer, and the landlord/seller still retains the house in the event of default, in addition to keeping all the money.
In this market, there are few if any such homes available. With properties selling almost as fast as they're listed, why would an owner enter into such an agreement, when he/she can cash out and be done with the place in a matter of weeks? If by chance you ever come across one offered as rent-to-own, it would likely be in a less-than-desirable location, have serious issues, or both.
Contrary to common belief, there is generally a large deposit required (non-refundable in the event the sale doesn't materialize), little or none of the rent would be credited toward the down payment, the interest on the sale portion would be at least twice the going bank rate, and you'd still have to qualify for a mortgage in a few years to pay off the owner (it's referred to as the "balloon").
I assume that you're considering this transaction because you do not have a sufficient down payment at this time. The last thing you want to do is to purchase a home on a shoestring, irrespective of financing. I always recommend that potential buyers figure their current monthly expenses to the dollar, then add 15%. If the number is comfortable, it's reasonably safe to proceed. Of course, the down payment would need to be in cash ... I always advise my buyers to have 6% to 8% of the sales price at hand for an FHA-insured loan, to cover all upfront costs including the down payment..
My advice is to lease until you've accumulated sufficient cash to proceed with a purchase. Keep your FICO score at least in the mid-600's (of course, the higher the better) and focus on the objective. You'll be there before you know it. I wish you well.