In today’s world where people can buy everything in installments ranging from mobile phones to desktops and even cars. It is mainly made possible because they had don’t have strict criteria to filter buyers into a category. Moreover, if you don’t have liquid cash in hand, you can use the credit card and pay the thing in installments. However, when it comes to housing there are strict rules and regulations that a potential buyer has to adhere to. Unlike regular installments, buying a house requires huge up-front payments, estimated at 2% to 10% of the property’s total worth. So, if you don’t have enough savings in hand then you have to take a loan or apply for a mortgage. Then again, they have strict criteria, where you have to produce proof of stable income source, full fill the required credit score, and the list goes on and on. Therefore, not having enough savings to pay the upfront deposit payment forced potential home buyers to opt for rent.
Another reason given by the renter on why they don’t go for buying a house than paying a regular rent is, not having enough money or can’t afford to enough for a save when they have other liabilities to fill to. Simultaneously, having a limited credit score also minimizes their access to the mortgage. Therefore, to empower renters and help them my home, the government has started a program with the aim of ‘turning renters into owners.’ If it is your first time reading this term, then you will find this article highly informative. Here you will find a brief introduction to what the rent to buy program means, what benefits it offers to the renter, and lastly the article also aims to highlight few fun facts that make the rent to buy program the best fit for first-time buyers.
What Turning Renters Into Owners Program Means?
It is a program launch by the government and another private real estate contractor or semi-government institute just like DreamAmerica. The aim of the program is to empower first-time buyers and renters to get a house. Unlike a mortgage, you don’t have to worry about the fulfill a huge list of documents, rather you as a first-time buyer have to fulfill basic criteria. It consists of income proof, a clean record of on-time rent payments for up to 12 months, etc.
Four Fun Fact About Turning Renters Into Owners
- Empower Buyer Who Can Not Qualify For The Mortgage
One of the most important things about the ‘rent to own program’ is, it allows people who are aspiring to buy a house but due to lack of credit score and having lower monthly income then the requirement is a big factor why people are not being able to get own house despite saving enough. Therefore, signing up for rent-to-own programs is considered a more sought out option as it allows people to live in a house, and simultaneously helps them in saving up for the deposit.
- Renter Can Live In A House, Pay Rent And In The End Can Qualify To Buy
Another best thing about this is, the buyer got to live in the dream house for a fixed period as stated in the lease. This means you can carefully evaluate your options, try the house, feel the vibes, and if at any moment you felt like this is not the house you were looking for then you can opt-out of the agreement. Hold on there is another benefit too, you can sell the lease to someone else and keep the rent deposit too.
- Minimum Front End- Deposit
Well, this is the best part. Have you ever heard your friends, colleagues, and acquaints saying that they had purchased a house for $1? You have heard right. This usually happens in the ‘Turning Renters into Owners’ program. In this, you are not required to pay a specific deposit fee. Since it is not refundable to going for $1 is a good option.
- Buyers Can Negotiate The Contract Terms
Lastly, in rent to own or rent to purchase a lease, the owner can negotiate the contract terms with the homeowners and create a win-win situation for both. However, the thing that you need to understand is, to carefully evaluate the contract terms, read out the contract in detail, or ask your realtor or lawyer to give you a brief on the contract. Make sure that the contract clearly contains the responsibilities of the owner in terms of property maintenance and tax returns.
Buying a home is more difficult than people think. If you want o buy a dream house and don’t have enough money, then there are two options that you can opt for. First, mortgage, and secondly, you can opt for rent to own. However, the latter one requires no up-front payment and you can easily test the house before you can buy.