5 Advantages of Preferring Rent to Own Homes Over Mortgage

Dream America
4 min readDec 8, 2021

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Rent to Own Homes Over Mortgage

Globalization and the availability of jobs in populated areas have increased the prices of residential property. This has forced people to pay hefty rents in order to secure living space in the city. At the same time, this continuous loop of paying rent has reduced the capabilities of people to own a property. However, the one who has all the required resources but limited liquid cash goes for buying a property via a mortgage. But this is a lengthier process and requires extensive time along with documentary proof. If a person fails to qualify for a single criterion, he or she can lose the entire mortgage case. Therefore, we have compiled this article to help people like you, who are planning to own a property but can’t find a suitable way other than increasing the credit score.

Here in this article, you will find a complete overview and comparison between buying a residential property via rent to own homes program or waiting to qualify for the mortgage.

Advantages Of Owning a House Via Rent To Own Program Vs Mortgage

Investing in a property is as technical as investing in stock, a single miscalculation or missed-contract statement can render a person helpless. In the case of a mortgage, lying on an application means you can be subjected to a lawsuit or you can disqualify from the mortgage program altogether. Therefore, it is recommended that you should opt for registering for rent to own program. Here are some advantages that you can enjoy.

1. Low Up-Front Payment — The top of our list includes little to no upfront payment. Unlike mortgages, this program requires no minimum up-front payment. You can either go for $1 or you can pay $100, the choice is yours, but, once the lease is complete, you will get the saved amount minus the upfront payment. On the other hand, to qualify for the mortgage you have to pay 20% of the down payment e.g., for the house with a $255K market value, you have to pay $50K as a down payment along with this, you have to fulfill the additional requirement too.

2. Liberty To Opt-Out of The Deal — In addition to the low up-front payment, rent-to-own homes offer liberty to the buyer to opt-out, once the agreed period is over. At the same time, the rentee gets the deposit back. Comparatively to this, the mortgage owner cannot opt out of the deal once they have signed the deal. Moreover, the mortgage owner can lose the right to own a house if he or she failed to pay the agreed amount on monthly basis. Therefore, unlike a mortgage, rent-to-own offer more freedom to the buyer, and give hope to the rentee in becoming a landowner without having the required credit score.

3. Short Payment Plan — When we talk about a mortgage, you are given limited options for a residential mortgage plan ranging from 1 decade to 40 years. Since to qualify for a mortgage, you need to have stable income sources and some savings in place too. But for rent to own you don’t have to wait for that long. Moreover, the lease term is short too. This means if you have a lease of 1 to 5 years, you can opt out of the program and take your saved with you and sign another deal. Lastly, it allows a person to test as many houses as he wants before settling for one. At the same time, it is highly beneficial for those, people who are living check to check and require some time to save up money to pay a deposit. For such people, it is recommended to opt for rent to own home program.

4. No Strict Criteria to Fulfill — While searching for different methods or ways to own a property, you must have seen the criteria require that every mortgage aspirant has to fulfill. It includes 20 to 30 percent deposit cash in hand. In addition to this, you have to produce documentary proof on income source, bank statement, identity, utility bills, etc. However, for rent to own program, you are required to produce documentary proof of paying 12 months of rent on time, income sources, but the minimum requirements are more flexible than a mortgage.

Conclusion

Buying a house is a huge investment that requires expert help in locating the right property and negotiating the price, and there are millions of profiles that you can explore and select the best match for you. However, when it comes to buying a property, you are left with only two options, rent to own or mortgage. The prior one is more flexible in terms of deposit, term, and you can also negotiate the rent-credit. However, in the latter one, you have to fulfill a certain set of requirements e.g., income to credit score, this makes owning a property a lost hope. If you are going through this, then opting for DreamAmerica’s rent-to-own program can serve you best.

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Dream America
Dream America

Written by Dream America

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If you could qualify for a mortgage today, would you buy a house? If so, the Dream America Program may be for you.

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