Please note that the opinions expressed herein are personal and professional opinions of the contributors whose names are been protected and are not necessary opinion of the organisation they represent.
“Sure, I have helped a couple buyers/sellers structure them. In one case the seller had no equity to cover commissions and closing cost and he had to move. He rented for 2 years with portion of payment buying down amount owed. The buyer had a BK and needed 2 years to be FHA eligible. You have to have contract and recorded on deed. Then buyer was able to show 2 years ontime payments and do it as a refi. Value went up, so it appraised and roled in CC. Everyone benefited.” M.R from Peoples Home Equity
“Great program if the client FULLY understands their contract. On the re-fi in order to complete the process of actual purchase be aware MOST institutional lenders shy away. The client should make sure they can complete the transaction at the end of the rent to oen process. Most terms in Ontario are 3 years, a lot can happen in 3 years.” J.M from Mortgage Brokers 360
“The benefit is that you are settling on a price now, which if prices go up, can be in your favor. If you do not have funds for a down payment it also builds one for you as part of the rent is predetermined to going towards a down payment to the owner. However, the rent then needs to be higher than the area to be able to say that the excess is being credited as a down payment.” P. from The Gordon Group, Inc.
“It can benefit buyers if they do it correctly and there isn’t a large difference in payment. If a buyer needs a year to repair credit they can get into the home now at a good price and close where their credit is repaired.” K.S from Northpointe Bank
“Rent to own are great for those clients trying to get into the market but not quite there. You need the right team for a rent to own and I recommend you proceed with caution. Find the team first and then suggest it for a client.” A.M from Dominion Lending Centres Calgary
“It gives the client the chance to get his down payment paid in increments, wont have a mortgage on their credit, credit scores normally wont stop the seller from doing the deal. Although this program can be very risky to the buyer, when they have no other options, its their chance to be a homeowner. They can always refinance once they can qualify for financing.. I hope this helps .” C from Call A Friend Financial Services, LLC
“There can be upsides and downsides to the rent-to-own scenario. There is no specific program at least in Washington State so be very careful about any agreement that you enter into and I would suggest a consulting a real estate attorney or at very least a paralegal before signing a contract.
Also, I would look at why you are entering an agreement of this nature. If it is because you do not have funds for a down payment I would recommend that you speak with a mortgage lender in your area to determine if there are options such as down payment assistance programs which may offer you an opportunity to purchase” S.K from American Pacific Mortgage