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Simply put, rent-to-own iswhere you rent a home for a certain period of time before you buy it. Depending on the terms of the contract, that period can range from several months to several years. These contracts are different than a traditional renter’s lease or purchase contract.
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What is a rent to own home?
What are rent to own homes? Rent to own homes are those with leases that include either an option to buy or a requirement to buy after a certain period of time. The rental payments include both rent and funds that contribute to a future down payment.
What is the difference between lease-to-own and rent to own?
Rent-to-own agreements include a standard lease agreement and also an option to buy the property at a later time. Lease-option contracts give you the right to buy the home when the lease expires, while lease-purchase contracts require you to buy it.
Can you buy a house with a rent to own contract?
If your contract is a rent to own contract, you simply have the option to buy the home once the renting term ends. In favorable conditions, you檒l probably want to purchase the home if you can; otherwise, you檒l lose all of your rent credit and option fee to the landlord.
What is a rent-to-own home?
There is an alternative, however: a rent-to-own agreement, in which you rent a home for a certain amount of time, with the option to buy it before the lease expires. Rent-to-own agreements consist of two parts: a standard lease agreement and an option to buy. 1