I am looking to repair my credit and possibly rent to own. I really need some expert advice in this process. Any suggestions?

Asked by Elana Marsh, Darby, PA Wed Oct 2, 2013

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Benny Smith, Agent, Pittsburgh, PA
Wed Oct 2, 2013
I also recommend consulting a lawyer on a Rent to own. But in most cases I recommend avoiding that setup. Why pay more for a place than it is worth just to say you are working toward ownership. Rent a place you can afford and save your money. Take some of those savings and repair your credit. Best of luck
1 vote
Lisa Chapman, Agent, Bryson City, NC
Wed Oct 2, 2013
Try ClarkHoward.com to find good advice about credit and home buying. Make sure you consult a lawyer before signing a rent to own contract.
1 vote
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Fri Oct 18, 2013
Good morning Elana,

Rent To Own is a better deal for the Seller than it would ever be for a potential Buyer.

Key Points of Rent-To-Own:
• Portion of monthly rent payment is set aside by Landlord towards a future down payment
• Landlord/Seller locks you into a price today for a purchase tomorrow
• Forces the Tenant/Homebuyer to save towards down payment
• Tenant/Homebuyer still has to apply for a mortgage in the future to purchase the home
Rent-To-Own "forces" savings towards a down payment. Your Landlord deducts a pre-determined amount to hold in a special bank account, called an "escrow" account until you have saved up enough---through this "forced-savings" method---to meet a down payment to purchase the home.
At the end of the agreement, usually 2 to 3 years, you must apply for a mortgage loan to complete the purchase of the home. The terms of the purchase price, including the down payment amount, and the amount to be set aside from the rental for down payment, are all set down at the time of lease signing.

You can save for a down payment on your own.

If you are dedicated to the idea of buying a home, create a savings plan. When you have enough for a down payment YOU get to decide on the price you're willing to pay for a home based on market conditions.
With Rent To Own you're locked in to the house and to the price. What happens if three years from now your life situation has changed? Maybe you need a bigger/smaller home. Maybe your employment has relocated. Maybe your credit or income is insufficient to qualify for a mortgage loan.

Get Prequalified by a local Mortgage Banker. You may find you're qualified now for a mortgage loan.

Trevor Curran
NMLS #40140
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