Targeted EIDL Advance Grant is a program under the Economic Injury Disaster Loan (EIDL) that provides financial grants for small business owners. It prioritizes those small businesses that are severely impacted by the pandemic.
Rent to own homes or also known as lease-to-own homes is a type of contract between the tenant or buyer and the owner of a property.
In rent-to-own, the seller is given a certain amount of time to rent the property before s/he will decide to purchase it.
For sellers, this is a beneficial way to put the property on the market especially if they have a hard time selling it. This may also be helpful for people looking for a decent house who have a limited budget.
However, going for rent-to-own agreements may also pose risks to both buyers and sellers, that’s why it is crucial to assess your budget and plans before signing the contract.
In this way, you can avoid jeopardizing your money and plans in purchasing a property. To know more about rent-to-own homes, read this article further.
The rent-to-own home contract is done when both the buyer and the seller establish an agreement in terms of rent pricing, the final purchase pricing, and the duration that the buyer rents the property.
Usually, a portion of monthly rental fees goes to the final payment of the house.
Further, a rent-to-own contract may also either oblige the tenant to purchase the property at the end of the bargain or give the tenant the option to purchase the property or turn it down, this will depend on the agreement.
In a rent-to-own contract, you should also expect to pay an initial amount of money that will serve as a down payment of the property. Once you pay for it, it is no longer refundable even if you decide not to purchase the property at the end of the contract.
There are primarily two types of rent-to-own contracts, mainly:
Deciding between lease-option and lease-purchase agreement can be confusing and tricky. The best option may depend on the situation of the real estate market.
If it happens that prices of houses in the state are rising, it is better to choose the lease-purchase agreement so that you can settle for a price you can afford.
Whereas if the prices are decreasing, the lease-option agreement would be the best for you. If you want to make sure that you choose the best option possible, consult your real estate agent before jumping to your final decision.
Are you still confused if you will go for a rent-to-own agreement? Weighing the pros and cons of your options will help you decide better.
Below are some that you might consider:
To know more about rent-to-own homes below are the expected process of the contract when you enter one:
It is important that you review the agreement first before signing. The contract should include the duration of your rental phase, the monthly rental fees, the percentage portion from the monthly payments that will go to the downpayment for the property, as well as the final and fixed price of the property at the end of the contract.
It is best to get an independent appraisal before agreeing with the final pricing of the property. At the same time, it is important to get a home inspection of the property first to determine if buying it is worth it at all.
After establishing the final agreement with the seller, you will then pay for an initial or option fee that serves as a downpayment and the opportunity to buy the property at the end of the contract.
In a rent-to-own agreement, it is crucial to pay your rental fees on time. Failure to do so might lead to a void of your agreement. Thus, you might lose the money that you have paid earlier before.
When you are near the end of the contract, it is advisable to shop for the right mortgage for you. This might help you save some dollars upon purchasing the property.
Rent-to-own homes come with both risks and advantages. If you have already given yourself the green light for a rent-to-own agreement, do not forget to weigh down the risks and benefits, because, just like in actually buying a house or property, going for rent-to-own is also one big decision to make.
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