Home Buying in 01772>Question Details

judy.d1924, Other/Just Looking in 55376

in a rent to own situation, what is the usual % of rent to be applied to down payment?

Asked by judy.d1924, 55376 Wed Jan 29, 2014

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7
It's really what the buyer and seller agree to. This amount is usually somewhat above the average
rental in the area. In this market I would recommend that you talk to a lender and see if you don't
qualify for a mortgage. If you have had bankruptcy in the past there are lenders who will now
work with this. Rent to own are tricky.....at the least hire an Attorney to review any documents you
may be given by the seller to sign. Best of luck!
0 votes Thank Flag Link Wed Mar 12, 2014
Whatever you are willing to agree to. The seller usually keeps it though when you can't buy the home so you are better off saving your own money and renting a smaller place than you can afford for a few years.
0 votes Thank Flag Link Thu Jan 30, 2014
Judy,

Sally is right on with her advice. If you do not qualify for a mortgage today, will you be able to qualify in 12 or 24 months when your option to buy comes due? If you fail to exercise your option, your deposit will not be refunded. The lease agreement and the option agreement should be separate agreements. The option to buy should be recorded. The terms of each should stated, i.e, the lease states the term and rental payment; the option terms, the purchase price, cancellation, maintenance and repairs, homeowners insurance, etc. If you do not understand the agreements, I would advise you to seek the advice of a real estate attorney.
0 votes Thank Flag Link Wed Jan 29, 2014
There is no set amount, also it is typically done in an area that the sales market is slow or the seller is asking way to much.
0 votes Thank Flag Link Wed Jan 29, 2014
Rent to Own, things to consider:

It is similar to renting, but the rent is higher than normal. There is an additional non-refundable deposit. Once purchased, the non-refundable deposit and a portion of your rent is devoted toward the purchase. If you choose not to continue with the purchase, the non-refundable deposit and the high rent is gone.

Regards,
Chad Roberts
Broker/Salesperson
Realty One Group
0 votes Thank Flag Link Wed Jan 29, 2014
It's the amount of $$ above the typical rent for your area. So if rents are typically $1000, and you are paying $1200. Then 200 can be applied.
0 votes Thank Flag Link Wed Jan 29, 2014
There is no set number. But you should be asking yourself if Rent to Own is a viable option for you. In my opinion, it isn't. I've never seen this actually end up with the buyer successfully buying the property at the end of the lease term. When the market was down, and sellers were desperate, yes, there were some cases of buyers able to buy a home this way. Not any more.

We are in a very healthy seller's market in most parts of the country. Sellers CAN and WILL sell to normal buyers who can qualify for a traditional mortgage.

I assume you're asking about this because you have credit issues and cannot qualify? I suggest you take the extra money you were planning on putting into a rent to own payment, and pay down, or pay off your DEBTS! Then save, save, save!

Good luck to you.
0 votes Thank Flag Link Wed Jan 29, 2014
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