Like many people in today’s economy, you may be interested in buying a home but are unable to save enough money to make a down payment. You may also have a credit score that is not high enough to qualify for a traditional mortgage, or your income may be insufficient. If you are facing one or more of these issues, you may wonder whether a rent-to-own home could be a good option.
Rent-to-own allows you to become a homeowner when you might not otherwise qualify. However, there can be a downside to rent-to-own situations, and it is always a good idea to know exactly what you are getting into before you sign the paperwork. If you are considering a rent-to-own home, speaking to an experienced Northwoods, WI real estate attorney who can help you make the best decision can be beneficial.
How Does Rent-to-Own Work?
If you choose a rent-to-own home, you will have a specific time period to rent the home before you have to decide whether you want to exercise your option to buy the home. Some agreements for rent-to-own homes require a fee that is called an option fee and is usually 2-7 percent of the agreed-upon price of the home. Paying the option fee allows you to lock in your option to purchase.