Have you ever considered renting to own a home? It’s a great alternative for first-time home buyers who can’t afford the cost of traditional home loans, as well as homeowners who would like to keep paying on the mortgage and don’t want to sell.
Actually, the first thing we recommend doing is to click here to see if you qualify. Many people qualify, and you might be pleasantly surprised.
A rent-to-own agreement lets you get back into the housing market while building your credit, gives you the time to save for a down payment, and more time to qualify for a mortgage loan.
So How Long Does a Rent to Own Lease Last?
While they might not be right for everyone, RTO homes can be a good fit if you’re looking to build equity in your home while still maintaining the flexibility and freedom of renting.
When you’re searching for a rent-to-own on your own or through a realtor, there are multiple options to consider. How much can I afford in rent? Should I sign an option to buy or a lease purchase? Can I bring my pets? Will this build my credit score?
However, there is one very important question that should rank above the rest: how long do I need to rent the property before I buy it?
A typical RTO lease has many components and legal obligations, but its length plays one of the most important roles in defining and clarifying the parameters of this type of agreement. It will determine how much you are able to put away for a down payment, how long you have to build your credit score, and what major repairs that need to be done to the property before the seller signs the deed over to you.
The length of time that a typical RTO lease varies. It can be longer, it can be shorter, but there are no hard and fast rules about how long it should be because it depends on the situation and the terms laid out in the lease agreement between the tenant and the landlord. It’s important to know what each of these lengths means to you so that you can make an informed decision about which one is right for your personal and financial situation.
A short-term rent-to-own lease is typically a one-year lease with the option to buy the house at the end of that year. If you choose this option, you’ll be able to live in your new home for one year before deciding whether or not you want to own it forever. Generally, this option is for people who aren’t sure if they’re ready to commit yet but are more financially able to qualify for a mortgage loan at the end of the lease agreement.
Medium to long-term leases run anywhere from two years up to five years (or in some situations even more). This gives renters enough time to get settled into their new place and feel financially comfortable making decisions about purchasing property in the area. However, if things don’t go as planned—and sometimes they don’t—they have plenty of time left on their lease before having committed themselves permanently to purchasing the property.
How long a rent-to-own lease lasts is dependent on the needs of both the renter and the homeowner. A longer lease gives sellers more time and money to recoup their initial costs, while a shorter lease will encourage renters to pay off their rental units faster if they decide that’s best for them.
As long as you understand your options and have enough time to save up for your down payment and build your credit, you should know exactly what you want out of your lease and your path to homeownership by the time you sign the dotted line.
Remember, you might qualify for a rent to own home, but you won’t know for sure unless you click here.