Rent To Own Homes In Los Angeles

Rent To Own Homes may offer a solution to those that are seeking housing but cannot qualify for a standard mortgage loan in today's tough lending environment. Rent To Own agreements tend to be more flexible to the conditions of a sale for both the buyer and seller and can pose both advantages and disadvantages.

Advantages

• Immediate Occupancy
• No Closing Costs
• Easier To Qualify For Than A Mortgage
• Repair Credit While Living In The Home
• You Can "Try Before You Buy"
• Building Equity From The Beginning
• A Path To Real Home Ownership

In addition to the advantages above a Rent To Own Home may be an alternative that is available to those that cannot qualify for a traditional mortgage, especially in a tight lending environment. If you are facing one of the following situations a Rent To Own Home may be a more accessible arrangement than a traditional mortgage.

No Credit History New Job Self Employed

Blemished Credit Own More Than One Home Down Payments Too High

Disadvantages

As in any decision there are always pros and cons. Some of the more common disadvantages to a Rent To Own homes situation are:

• No Interest Deduction During Rental Phase
• Possible Higher Sales Price
• Possible Owner and Title Leans
• Lease Cancellation
• Death or Disability of Seller
• Major Improvements Can Become The Seller's Property
• Unknown Title Transfer

If you are considering a Rent To Own Home don't be afraid to ask the owner about their credit or financial condition. You can rest assured that they will ask you about theirs.

Rent To Own Example

36 Month Lease With A 3% Option Fee of $6000
The Option Fee is paid at the beginning of the lease. This gives the buyer the option to purchase the home for a given price at a given time (usually at the end of the lease). This fee in non-refundable and usually does not constitute a down payment, deposit, or credit.

Monthly Rent = $1800
The total amount the tenant/buyer pays on a monthly basis to live in the home during the lease period.

Monthly Rental Credit = $500
In many arrangements a portion of the rent payment is credited to the down payment at the time of the purchase. This is known as the Monthly Rental Credit. This accumulates during the lease period on a monthly basis. At the end of a 36 month lease the accumulated rental credit would be $18,000.

In comparison to a standard mortgage at 8% this example actually builds equity faster during the lease phase with a monthly rental credit of $500. The mortgage would have a principle and interest payment of $1468/month. If you added PMI, insurance, and taxes to this amount it may result in a payment as high as the rent to own agreement.

Home Price $200,000
At the end of the lease the tenant becomes a buyer and is required to secure financing to purchase the rent to own home. In this example the buyer would pay the purchase price less the accumulated monthly rental credits.

$200,000 - $18,000 = $182,000

Rent To Own And Lease Purchase Homes In Los Angeles

Pasadena Santa Monica Simi Valley

Inglewood Redondo Beach Anaheim

Lake Forest Newport Beach Thousand Oaks

Glendale Lakewood Long Beach