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Rent vs Buy in 95113 : Real Estate Advice

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Mon Jul 3, 2017
Kathy Burgreen answered:
You seem to misunderstand how Rent To Own or Lease To Own works. This method requires you to pay a large upfront deposit which goes towards the purchase of the home + you pay a monthly rent determined by the owner + you pay a monthly premium amount which goes towards the down payment. You will also be required to sign a contract. The contract typically states that if you don't purchase the home for whatever reason, the owner / landlord will keep all of your money. You do not get any refunds. This is why Rent To Own is a great deal for sellers / owners and a very bad deal for renters.
As much as you think you will buy that home, you need to think: Since a typical Rent To Own lease is 1 - 3 years, suppose at the end of the lease, you don't qualify to buy that house. Lenders will need to verify your employment, income, savings, credit, debt to income ratio and tax returns. If you can't get a loan from a lender, the owner / landlord is not going to sell their house to you and will keep all of your money.
Another situation: suppose you lose your job, have a medical crisis, find a job out of town and need to move elsewhere, etc. You're not buying that house and you just lost thousands of dollars.

Your best method is to continue renting the regular way, save up some money until you're ready to buy, then talk to a lender. Sorry but you need to rent for now.
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