Renting to own is a great option for people who need time to purchase a house. When you lease to own, a portion of your rental fee goes toward paying for the house you are renting, at a later date. The process of buying rent to own homes in Baltimore MD begins with two agreements. One of them is the lease agreement and the other is an option to purchase the house.
The rental agreement appears much like a conventional lease. It specifies the rental charge and the lease term. In many agreements, the term is two to three years. You also need to meet some terms and conditions. Examples include occupancy limits, no pets and requirements regarding general conduct. If you violate the terms and conditions, you will be kicked out and you will risk losing the money you have paid towards the eventual price of the home.
The rental agreement may also state that tenants are responsible for performing maintenance on the property. This is meant to ensure that tenants keep the house in good condition because it will become theirs in a few years. Nonetheless, the property owner will be required to make major repairs.
In the rent to buy option, you have the opportunity to buy the home you are renting, within the period specified in the agreement. Therefore, if the lease agreement specifies a lease term of three years, you have 3 years to purchase the property. You will not worry that another person will purchase the property.
The tenants are also asked to pay an option fee. The fee may range from 2 to 7.7 percent of the price of the property. The option fee is credited towards buying the property when the lease term ends.
Before signing the lease agreement, you should negotiate the rental fees with the landlord. Some of the rental fee will be saved as credit for the purchase of the property. If the credit you opt for is high, your rental charges will be higher. You should also note that your rental agreement may stipulate that if you fail to pay rent on time, you may lose the credit that would have been saved for that month.
In a lease to own deal, you will most likely agree to a buying price up front. Typically, this is the current market value of the home or a bit higher. In some cases, you may delay this decision until your lease term ends. The purchase price of the home is negotiable. However, if you make the decision not to buy the house, the credit and option fees will not be refunded.
As a buyer, the lease to own arrangement can be beneficial if you are unwilling to get a mortgage the conventional way. This may be the case if you do not have enough money for the deposit or if your credit is not that good. With the rent to own option, you will get additional time to save money and boost your credit score while you build some equity. This is also a good option if you want to try out a particular neighborhood.
To help you get on the property ladder, consider our range of rent to own homes in Baltimore. Come and learn more by visiting the related website at http://equitypartnersllc.org.