Are you interested in purchasing a home, but you aren’t able to get approved for a mortgage? There are a few options that might be considered in this situation, and one of the most popular is a rent-to-own agreement.
Rent-to-own might be the only solution if you have a poor credit rating or if you don’t have enough money for a down payment. But, it is important that you know a few essential things before you decide if rent-to-own is right for you:
You Will Pay More
With a rent-to-own agreement, you should expect that your monthly payment will be higher than a standard rent payment. Part of the monthly payment is applied towards the down payment for the property, and you might even be asked to write two checks per month: one for the down payment and the other for rent.
Upfront Purchase Price
The price of the home is negotiated in the beginning when the agreement is put together. It is essential that you understand the local market and how the home compares with comps in the neighborhood. Don’t skip the appraisal process, and make sure that you have a good Atlanta real estate agent who can help with the negotiations.
A Contract is Essential
Even if you trust the owner of the property, it is still important to have a contract in place. This paperwork will help you to avoid miscommunications. In fact, a contract can protect the relationship between you and the seller, because the paperwork will ensure that everyone is on the same page with the details of the agreement.
Include an Escape Clause
You might sign the contract with the best of intentions, but sometimes things can happen which might change your mind about the purchase. For example, you might be facing unforeseen circumstances that prevent you from having the financial ability to complete the purchase. In the contract, include an exit clause that provides details about the liabilities for both you and the seller. If something happens, then you will have a way out of the contract
Keep in mind that rent-to-own mortgages are typically carried by the owner of the home, but you might find yourself in a situation where you need to obtain financing from another lender. It is harder to get a mortgage in a rent-to-own situation, so you need to be sure that you have a lender who will support the financing if needed.
Here at Duffy Realty of Atlanta, we want to help you buy the home of your dreams. If you need help with buying your first home, then we invite you to contact us anytime for more information. Our team will help you understand more about the different financing options that you might consider, and we can provide you with the contact information for trusted lenders that we’ve worked with before. Call us today: (678) 318-1700