When looking for a new home, there are many different financing options to consider. Rent-to-own programs, AKA lease-to-own programs, seem to be a great option for those who want to own a property. However, there are some common misconceptions about rent-to-own programs that potential homebuyers should know.
In this blog, you will learn what is a lease-to-own program how they work, and what to do if you want to rent-to-own home in Dallas.
Rent-to-Own Programs Defined
It’s important first to understand how rent-to-own programs work. A rent-to-own program is when a potential homebuyer leases the property from a seller for a set period, typically 1-3 years. During this lease period, the buyer will make monthly payments that go towards the eventual purchase of the home. At the end of the lease period, the buyer will have the option to purchase the home for an agreed-upon price or walk away from the property.
Common Misconceptions of Lease-to-Own Programs
Now that you understand what a rent-to-own program is and how it works, let’s clear up some common misconceptions:
Rent-to-Own Is the Best Way for Buyers With Bad Credit To Buy a Home
Rent-to-own is not a good option for those with bad credit because the lease agreement will likely require the tenant to maintain good credit to qualify for the purchase option at the end of the lease.
Rent-To-Own Involves Seller Financing
Another common misconception is that rent-to-own agreements always involve seller financing, when in fact, rent-to-own agreements can be structured in several different ways. Such as, the tenant could get a mortgage from a bank or other financial institution to exercise the purchase option at the end of the lease.
Rental Payments Are Applied to the Down Payment on the Home
In most rent-to-own agreements, rent payments are not applied towards the home’s down payment or purchase price. Rather, rent payments are made in addition to a monthly “rent credit” payment placed into an escrow account to be used towards the purchase price of the home at the end of the lease.
What to Do if You Want Rent-to-Own Home in Dallas
You may think that hiring a real estate agent is a great form to find rent-to-own homes in Dallas. However, working with a realtor is long and can be costly, so you may consider using a rent-to-own home listing service like We Love Dallas Homes.
At We Love Dallas Homes, we offer lease-to-own programs to help our clients find their dream homes. We work with both buyers and sellers to make sure that everyone is on the same page and that all parties understand the terms of the agreement.
If you’re interested in learning more about rent-to-own homes in Dallas or how we can help you find your dream home, contact us or visit our website today!