Rental with a lease option usually only gives the renter first rights if the owner intends to sell. It doesn't establish a sale price or even allow a rental rebate toward purchase, unless that is negotiated. In my opinion, it is really rather useless, because if an owner wants to sell and the renter can buy for the price they agree upon, of course they will sell to the renter. Why wouldn't they.
It does not obligate the renter to buy and agrees to nothing.... more
A believe you mean a contract for deed is where the seller is financing you instead of going to a lender. Typically, the seller will charge you more interest than a regular lender, and at the lower lender rates now, probably a lot more - maybe even double. Plus, you don't get to negotiate sales price, usually.
To minimize risk, you need to check with an attorney to ensure that the agreement is drawn up with the house in trust or something to ensure your payments go toward ownership, who pays the taxes, etc.
And there are risks involved with partnerships, and this is one.
On the upside, you can get into a house and get payments to go toward something.... more
You may have some "clean up" work to do, but scores alone aren't the only factor. Feel free to call me and I can refer you to a trustworthy lender who can give you a detailed analysis.
Baird and Warner