Rent to Own...Good Idea...??

Question

My Husband just started his own Indoor/Outdoor Tile Business,. We currently Rent a 2Bedroom Condo....We have 2 kids...and they each really need there own space. We attempted to buy...but since my husband started a new business we cant get a loan becuase the banks want at least 2 years of Tax returns.

I honestly can't see myself living in a 2 bedroom for 2 more years....but I have a 7 yr old daughter who I cant move in an out of different schools renting a 3 bedroom somewhere..So here is my dilema...

Renting to Own,.... Sounds like the route for us...if we find the right house...Is this a good idea? Or bad...?

Explain exactly what it is too...if you could..

We need more space...and I need to be sure our next move is permanent, my son has one more year till kindergarten and my daughter is in 2nd grade this year and I need there next school to be the school they stay in...I dont want to move my kids around a ton.

When you rent to own do you work with a lawyer as if you were renting so it is all legal,..?

Answer 1

very few rent to owns are legitimate and none of them ever come to a satisfactory conclusion for either the buyer,the owner or middleman who is renting to own the house to you. In most all cases its a scam to bilk as much money out of someone before the mortgage holder forecloses and the rent to own victim loses his down payment and all the rent he/she has paid to date. The middleman flipper pockets the money and giggles.

either be a renter ( the lender may still foreclose but at least you do not have serious money invested ) or buy the traditional way with your own loan and feel secure you will not be evicted if you make the payments.

Answer 2

I found a site that addresses almost everything you said.

For a lot of frequently asked questions on rent to own you can check out: http://www.irenttoown.com/frequently-ask...

It gives you a good insight on what it is, a sample transaction, etc

Here is also another one that gives you the benefits: http://www.irenttoown.com/benefits/

Both the links are pretty good to give you an idea on what you can do with rent to own.

Hope it helps!

Answer 3

.  It's not a good idea.  It just sounds good.  Have you read the old questions on Answers from people who were unhappy with Rent to Own. First, you can buy a house today but your interest rate will be 8%.  You can do it.  It is high because you don't have the tax returns.

If the owner has any title problems (an ex wife has to sign, etc) you will have waited a year or 2 for a house you can never buy.  And if the house goes up in value, the owner will not agree to sell it for the "agreed-upon" price in 2 years.  He will feel cheated and he won't do it....even tho you have a legal contract.  

To be valid, you must give a Lease to Own seller some money.  What do you do if that money disappears?  What if the seller leaves town?  Stops returning your phone calls?

Answer 4

  A  very  good  IDEA  and  you  are  making   the  right  decision  ,you  are  renting  and  owning  at  the  same  time . CONGRATULATIONS,.

The seller  and  Realtor  will  guide  you  and  it  will  be  all  legal, .

Answer 5

Renting to own is generally a poor idea, since sellers will want you to fully purchase the property as soon as possible.  Lenders DO want at least two years of tax returns as a means of verification of the income your husband generates in his new business.  HOWEVER, having those tax returns does not mean that you will be approved for a loan unless he is very successful in that time frame.

If you do elect to go this route, insure that you have at least four years time frame in the option to purchase in which to obtain your own mortgage.  At least your husband will have the time needed to get his business making good profit.  If you do not qualify for a mortgage in the timeframe allotted, chances are that you will lose everything you paid to 'rent to own' the property you select, and will be back to renting again.

Answer 6

It's a good idea to rent-to-own if you don't have the money for a down payment or you want to try out a home before you buy it ( do you buy shoes without trying them out first? )

But make sure you get at least 50% rental credit and you have a solid contract.

I'm a rent-to-own specialist in the South East. I've seen some unethical practices from other companies. That's why you need a solid contract.