Rent to Own/Lease Purchase Homes

[Jeanne D'Arc]

My husband and I are in a bad situation with our living
situation, the home i have grown to love I will soon have
to say goodbye to, my husband got laid off at a bad
time, and our roommate ditched us , so we are losing
all of our savings and need to get out of here, essentially
i am tired of renting perpetually.

Anyways I have found myself attracted to the idea of
rent to own or Lease purchase home. What are
the differences ?

What should I know about these?

What are the Pro's and Con's?

[Jeanne D'Arc]

[rabrog]

I don't have an answer but am curious as well!

Jenn

[AEZMama]

From what I understand from friends who are doing this, you pay a monthly "rent"-a certain amount goes towards rent, the rest towards a downpayment. The leasor/seller will spell out the terms (6 mos, 1 year, etc). After the alloted time, you will have a downpayment and can go ahead with a loan that quite often the seller will assist or be the lender.

Some places also do some sort of fast tracked program, but I don't understand that at all.

I have friends who are doing this in SE Georgia and have the cutest place. We are thinking about the same thing at some point.

[newmommy]

DH and I just negotiated a Lease Purchase Agreement so I will share with you our eperience so far:

We do have an Agent so please get one.

Our Agent drew up a Lease Purchase Agreement and a Purchase Agreement.

We are doing a 1 year Lease: February 08-February 09. Which means we have agreed to purchase the house no later than February 09 (although our goal is within the next 6 months)

The house was listed orginally at $199,000...DH negotiated (and they accepted) the price we would give them at $175,000 (with an unfinished basement I told DH we could have negotiated lower )

The Sellers will pay $5,000 towards Closing Costs.

They agreed to a $200 rent deduction. Their mortgage is $1,400 but they only want us to pay $1,200 per month.

They are also responsible for ANY repairs for the house.

We agreed to pay their HOA fees.

We agreed to give them $3,000 cash ($1,200 towards February 09 rent) and the rest will be held in "escrow" (will need the name of the Financial Institution being held) and can/will be applied towards Closing Costs.

Before we move in, they are going to shampoo the carpets and paint the whole house (interior).

To protect ourselves, we are asking the Sellers to provide us with a Proof of Payment receipt towards their Mortagage. We don't want to be in the house and 1 day get a letter saying the house is in Foreclosure.

HTH!